Recommendation of the European Central Bank of 2 May 2003 on the statistical reporting requirements of the European Central Bank in the field of balance of payments and international investment position statistics, and the international reserves template (ECB/2003/8)
Date: 2003-05-02
Institutions: European Central Bank
Subjects: European Central Bank, balance of payments, data transmission, foreign-exchange reserves, statistics

28.5.2003

EN

Official Journal of the European Union

C 126/7

EUROPEAN CENTRAL BANK

RECOMMENDATION OF THE EUROPEAN CENTRAL BANK

of 2 May 2003

on the statistical reporting requirements of the European Central Bank in the field of balance of
payments and international investment position statistics, and the international reserves template

(ECB/2003/8)

(2003/C 126/06)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank, and in particular to
Article 5(1) and the third indent of Article 34(1) thereof,

Whereas:

Therefore, some of the tasks to be undertaken to meet
these requirements require cooperation between the ECB
or the NCBs and such competent authorities, in line with
Article 5(1) of the Statute. Article 4 of Council Regulation
(EC) No 2533/98 of 23 November 1998, concerning the
collection of statistical information by the European Central
Bank (2) requires the Member States to organise themselves
in the field of statistics and to fully cooperate with the
ESCB in order to ensure the fulfilment of the obligations
arising out of Article 5 of the Statute.

(1) To fulfil its tasks, the European System of Central Banks
requires comprehensive and reliable balance of
(ESCB)
payments and international
investment position statistics,
and the international reserves template, showing the main
items affecting monetary conditions and exchange markets
in the euro area. The European Central Bank's (ECB's) stat-
istical requirements in this area are laid down in Guideline
ECB/2003/7 of 2 May 2003 on the statistical reporting
requirements of the European Central Bank in the field of
balance of payments and international investment position
statistics, and the international reserve template (1).

(2) Article 5(1), first sentence, of the Statute requires the ECB,
assisted by the national central banks (NCBs), to collect
either from the competent authorities other than NCBs
or directly from economic agents the statistical information
necessary in order for it to undertake the tasks of the ESCB.
Article 5(1),
these
second sentence, provides
purposes it shall cooperate with the Community insti-
tutions or bodies and with the competent authorities of
the Member States or third countries and with international
organisations.

that

for

(3) Information necessary to meet the ECB's requirements in
and international
the
investment positions statistics may be collected and/or
than NCBs.
compiled by competent authorities other

field of balance of payments

(4) In cases where, in accordance with national rules and estab-
lished practices, the reporting agents report to competent
authorities other than NCBs, such authorities and their
respective NCBs have to cooperate with each other to
ensure that
the ECB are
the statistical requirements of
met. In Ireland the Central Statistics Office (CSO), and in
(UIC), collect and
Italy the Ufficio Italiano dei Cambi
compile necessary information in the field of balance of
investment position statistics.
payments and international
In order to meet
the
Ireland and the CSO, and the Banca
Central Bank of
d'Italia and the UIC, should cooperate with each other.
Such cooperation should include the establishment of a
permanent structure for transmission of data, unless the
same result
legislation.
is already achieved by national
The UIC, under Italian Legislative Decree No 319/9 of 26
August 1998 (3),
is an instrumental entity of the Banca
d'Italia.

the said statistical requirements,

(5) As laid down in Article 4(3) of Guideline ECB/2003/7 of 2
May 2003, where competent authorities other than NCBs
are the source of statistical information marked as confi-
such information will be used by the ECB
dential,
exclusively for
the exercise of ESCB-related statistical
tasks, unless the reporting agent or the other legal or
natural person, entity or branch which provided the
information, assuming that
it can be identified, has
explicitly given its consent to the use of such information
for other purposes.

(1) OJ L 124, 28.5.2003.

(2) OJ L 318, 27.11.1998, p. 8.
(3) Gazzetta Ufficiale No 206, 4.9.1998.

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Official Journal of the European Union

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For

this

(6) Data on monthly and quarterly balance of payments and
annual international investment position statistics showing
the main items affecting monetary conditions and exchange
markets in the euro area should be made available to the
Central Bank of Ireland and the Banca d'Italia in a timely
manner.
statistical
information should be transmitted according to modalities
agreed upon with the respective NCB or, in the absence
thereof, on or before the 30th working day following the
month to which data relate for monthly balance of
payments data, within three months of the end of the
quarter
to which data relate for quarterly balance of
payments data and within nine months of the date to
which data relate for the international investment position.

required

purpose

the

to competent authorities other

(7) The Centralised Securities Database (CSDB), which will in
(compi-
the future be used for many different statistical
lation and production) and non-statistical
(economic,
financial stability or operation analyses) purposes, will be
made available to NCBs. The data content will be made
available
than NCBs,
subject to any legal constraints. This will, notably, assist
their production of the required data for the compilation
of
statistics
it should
concerning portfolio investment.
be possible to accurately record the sectoral breakdown
of
in portfolio investment
liabilities in the euro area balance of payments and inter-
investment position when the CSDB system is
national
operational.

the euro area transactions and positions
In particular,

transactions and positions

(8) It is necessary to set up a procedure to carry out technical
amendments to the annexes to this recommendation in an
effective manner, provided that such amendments neither
change the underlying conceptual framework nor affect the
reporting burden of reporting agents in Member States.
Account will be taken of
the Statistics
Committee of the ESCB when following this procedure.
NCBs and other competent national authorities may
propose such technical amendments to the annexes to
this recommendation through the Statistics Committee
and its relevant working group.

the views of

HAS ADOPTED THIS RECOMMENDATION:

Article 1

Definitions

For the purposes of this recommendation:

— ‘participating Member State’ shall mean a Member State
which has adopted the single currency in accordance with
the Treaty,

— the term ‘resident’ shall have the same meaning as defined

in Article 1 of Regulation (EC) No 2533/98,

— ‘euro area’ shall mean the economic territory of the partici-
pating Member States, and the ECB. Territories belonging
to, or countries associated with, euro area Member States
are given in Annex IV, Table 5,

— ‘Eurosystem’ shall mean the NCBs of

the participating

Member States and the ECB,

— ‘cross-border transaction’ shall mean any transaction that
creates or redeems, in full or in part, claims or debts, or
any transaction that implies the transfer of a right over an
object between residents of the euro area and non-euro area
residents.

— ‘cross-border positions’ shall mean the stock of financial
claims on and financial liabilities to non-euro area residents.
Cross-border positions shall also encompass (i) land, other
tangible non-produced assets and other immovable assets
physically located outside the euro area and owned by euro
area residents and/or located inside the euro area and
owned by non-euro area residents; and (ii) monetary gold
and special drawing rights (SDRs) owned by euro area
residents.

(9) Since the adoption of Recommendation ECB/2000/5 of 11
May 2000 on the statistical reporting requirements of the
European Central Bank in the field of balance of payments
statistics,
the international reserves template and inter-
national investment position statistics (1), the exchange of
information within the ESCB has developed
statistical
significantly.
It is therefore necessary to replace Recom-
mendation ECB/2000/5 with the present Recommendation,

(1) OJ C 176, 21.6.2001, p. 4.

However, to the extent necessary to compile the portfolio
investment account and the portfolio investment income
account within the balance of payments statistics, and the
international
portfolio investment account within the
investment position statistics, covering the euro area, the
terms ‘cross-border positions’ and ‘cross-border transactions’
also include positions and transactions in the assets and/or
liabilities of euro area residents vis-à-vis residents of other
euro area Member States,

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— ‘reserve assets’ shall mean highly liquid, marketable and
creditworthy claims held by the Eurosystem on non-euro
area residents and denominated in currencies other than the
euro, plus gold, reserve positions in the IMF and SDR
holdings,

— ‘other foreign currency assets’ shall mean (i) claims held by
the Eurosystem on euro area residents denominated in
currencies other than the euro; and (ii) claims held by the
Eurosystem on non-euro area residents denominated in
currencies other than the euro which do not meet the
liquidity, marketability and creditworthiness criteria of
reserve assets,

— ‘reserve-related liabilities’ shall mean predetermined and
short-term net drains on the Eurosystem,
contingent
similar to reserve assets and other foreign currency assets
of the Eurosystem,

— ‘balance of payments’ shall mean the statistical statement
that reports, with the appropriate breakdown, cross-border
transactions during the period under review,

— ‘international reserves template’ shall mean the statistical
statement that reports, with the appropriate breakdown,
stocks of reserve assets, other foreign currency assets and
reserve-related liabilities of the Eurosystem at a reference
date,

— ‘international

investment position’ shall mean the annual
balance sheet that reports, with the appropriate breakdown,
the stock of cross-border financial assets and liabilities at a
reference date.

The information shall be made available in accordance
2.
with the statistical standards and requirements of
the ECB
concerning balance of payments and international investment
position statistics as laid down in Annexes I, II, III, IV, V and
VII to this recommendation. Without prejudice to the ECB's
monitoring task as laid down in Annex VI to this recommen-
dation, its addressees shall monitor the quality and reliability of
statistical information made available to the respective NCB.

Article 3

Permanent cooperation

The addressees of this recommendation shall establish with
their respective NCB,
in writing, the appropriate modalities
of cooperation to ensure a permanent structure for trans-
mission of data which fulfils the statistical standards and
requirements of the ECB, unless the same result is already
achieved by national legislation.

Article 4

Simplified amendment procedure

Taking account of the views of the Statistics Committee, the
Executive Board of the ECB shall be entitled to make technical
amendments to the annexes to this recommendation, provided
change
such amendments neither
that
the underlying
conceptual
the reporting burden of
framework nor affect
reporting agents in Member States.

Article 5

Final provisions

This

1.
ECB/2000/5.

recommendation shall

replace Recommendation

Article 2

This recommendation is addressed to the CSO in Ireland

2.
and the UIC in Italy.

Provision of statistical information to the NCBs

and

positions

transactions

cross-border

In so far as the collection of statistical

information
1.
is
concerning
entrusted to the addressees of
this recommendation, each
shall ensure that it is made available to the respective NCB
in a timely manner. For
this purpose, unless otherwise
agreed with the said NCB, the required statistical information
shall be transmitted on or before the 30th working day
following the month to which data relate for monthly
balance of payments data, within three months of the end of
the quarter to which data relate for quarterly balance of
payments data and within nine months of the date to which
data relate for the international investment position.

This recommendation shall be published in the Official

3.
Journal of the European Union.

Done at Frankfurt am Main, 2 May 2003.

The President of the ECB

Willem F. DUISENBERG

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ANNEX I

STATISTICAL REPORTING REQUIREMENTS OF THE EUROPEAN CENTRAL BANK

1.

Statistical obligations of the national central banks (NCBs)

1.1. The NCBs make available to the European Central Bank (ECB) data on the cross-border transactions, stocks of
reserve assets, other foreign currency assets, reserve-related liabilities and cross-border positions necessary to enable
it to compile the aggregated balance of payments and international investment position statistics and the inter-
national reserves template of the euro area.

1.2. The data are accompanied by readily available information on single major events and on reasons for revisions,
when the magnitude of the change to the data caused by such single major events and by revisions is significant, or
upon request by the ECB.

1.3. The required data are made available to the ECB as laid down in Annexes II, III and IV, which conform to current
international standards, notably the fifth edition of the IMF Balance of Payments Manual. The required data on
transactions and positions concerning portfolio investment liabilities broken down by sector of the euro area
resident issuer as laid down in Annex II, Sections 1.1, 1.2 and 3 and Annex III, Tables 1, 2 and 4 are made
available as from 1 July 2005; if the Centralised Securities Database system is not operational by 31 March 2004,
the deadline will be 15 months from the date on which the Statistics Committee informs the Governing Council
that it is operational.

1.4. The required data on the balance of payments are made available on a monthly and quarterly basis. The required
data on the international reserves template are made available as at the end of the month to which the data relate.
The required data on the international investment position are made available as at the end of the calendar year to
which the data relate.

1.5. As from 1 January 2005 portfolio investment collection systems conform to a model that is considered at least
‘acceptable’ according to the table set out in Annex VII. If NCBs are unable to meet this deadline they will establish,
by the end of June 2003, in liaison with the ECB, a timetable to comply with the common standard.

2.

Timeliness

2.1. Data for the monthly balance of payments of the euro area are made available to the ECB by the close of business

on the 30th working day following the end of the month to which the data relate.

2.2. The quarterly detailed breakdown for the balance of payments of the euro area is made available to the ECB within

three months of the end of the quarter to which the data relate.

2.3. The data on the international reserves template are made available to the ECB within three weeks of the end of the

month to which the data relate.

2.4. The data on the international investment position are made available to the ECB within nine months of the end of

the year to which the data relate.

2.5. Revisions concerning the balance of payments and the international investment position of the euro area are made

available to the ECB according to the time schedule laid down in Annex V.

2.6. The national collection of these data is organised with a view to meeting these deadlines.

3.

Transmission standard

The required statistical information is made available to the ECB in a form which meets the requirements laid down
in Annex V of this recommendation.

4. Quality of the statistical information

4.1. Without prejudice to the ECB's monitoring tasks as laid down in Annex VI, the NCBs,

in cooperation with
competent authorities other than NCBs where relevant, ensure the monitoring and the assessment of the quality
of statistical information made available to the ECB. The ECB assesses in a similar manner data relating to the euro
area balance of payments, international investment position statistics and international reserves. The assessment is
carried out in a timely manner. The Executive Board of the ECB reports yearly to the Governing Council on the
quality of the data.

4.2. The ECB's monitoring of the quality of statistical information may include scrutiny of revisions made to these data:
first, to include the latest assessment of the statistical information, thereby improving the quality; secondly, to
ensure as far as possible consistency between the corresponding balance of payments items for each of the different
frequencies.

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STATISTICAL REQUIREMENTS OF THE EUROPEAN CENTRAL BANK

ANNEX II

1.

Balance of payments statistics

The European Central Bank (ECB) requires balance of payments statistics at two frequencies: monthly and quarterly
in respect of the corresponding reference calendar periods. Annual data are compiled by adding up the quarterly
data reported by the Member States for the corresponding year. As far as possible, balance of payments statistics
should be consistent with other statistics provided for the conduct of monetary policy.

1.1. Monthly balance of payments statistics

O b j e c t i v e

The objective of the monthly balance of payments of the euro area is to show the main items affecting monetary
conditions and exchange markets (see Annex III, Table 1).

R e q u i r e m e n t s

It is essential that the data are suitable for use in the calculation of the balance of payments of the euro area.

In view of the short deadline for the provision of the monthly balance of payments data, their highly aggregated
nature and their use for monetary policy purposes and foreign exchange operations, the ECB allows some
departure from international standards, where unavoidable. Recording on a full accruals or transactions basis is
not required. In agreement with the ECB, national central banks (NCBs) may provide data on the current and
financial account on a settlement basis. Where necessary to meet the deadline, the ECB will accept estimates or
preliminary data.

The requirement for each broad category of transaction is assets and liabilities (or credits and debits for current
account items). In general this requires NCBs, as regards external transactions, to distinguish between transactions
with residents of other euro area Member States and transactions outside the euro area. NCBs do this in a
consistent manner.

When membership of the euro area changes, the NCBs are required to implement the change in the definition of
the country composition of the euro area from the date on which the change in membership takes effect. Best
estimates for historical data covering the enlarged euro area are requested from NCBs of the euro area in its
previous composition and of the new participating Member State(s).

In order to permit a meaningful aggregation of the data relating to the euro area on a monthly basis in the area of
portfolio investment, a distinction is required between transactions in securities issued by euro area residents and
transactions in securities issued by non-euro area residents. The statistics on net
transactions in portfolio
investment assets of the euro area are compiled by aggregating reported net transactions in securities issued by
non-euro area residents. Statistics on net transactions in portfolio investment liabilities of the euro area are
compiled by consolidation of net transactions in total national liabilities and net transactions in securities issued
and purchased by euro area residents.

An analogous reporting requirement and compilation method for the aggregate data are applied for portfolio
investment income.

With a view to compiling the monetary presentation of the balance of payments, NCBs are required to submit the
data broken down by institutional sector. For the monthly balance of payments the following is the sectoral
breakdown:

— for direct investment: (i) MFIs (excluding central banks); and (ii) non-MFIs,

— for portfolio investment assets: (i) monetary authorities; (ii) MFIs (excluding central banks); and (iii) non-MFIs,

— for other investment: (i) monetary authorities; (ii) MFIs (excluding central banks); (iii) general government; and

(iv) other sectors.

With a view to compiling a sectoral breakdown of the balance of payments, thereby allowing the construction of a
monetary presentation, NCBs will be required to provide, from the date laid down in Article 2(5) of the Guideline
ECB/2003/7, data on net transactions in portfolio investment securities issued by euro area residents broken down
by the institutional sector to which the issuer belongs. In addition, portfolio investment liabilities will include a
breakdown by institutional sector of the domestic issuer.

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The statistics on net transactions in portfolio investment liabilities of the euro area broken down by sector are then
compiled by consolidation of the respective sectors' net total national liabilities and the corresponding net trans-
actions in securities issued and purchased by euro area residents.

1.2. Quarterly balance of payments statistics

O b j e c t i v e

The objective of the quarterly balance of payments of the euro area is to provide more detailed information to
permit further analysis of external transactions. These statistics will notably contribute to the financial accounts
under preparation and to the joint publication of EU/euro area balance of payments in cooperation with the
Commission of the European Communities (Eurostat).

R e q u i r e m e n t s

Quarterly balance of payments statistics conform as far as possible to international standards. The required
breakdown of quarterly balance of payments statistics is presented in Annex III, Table 2. Harmonised concepts
and definitions used in the capital and financial accounts are set out in Annex IV.

The breakdown of the quarterly current account is similar to the one required for the monthly figures. However,
for income a more detailed breakdown is needed on a quarterly basis.

In the financial account, the ECB applies a simplified version of the requirements of the fifth edition of the
International Monetary Fund (IMF) Balance of Payments Manual (BPM5) for the ‘other investment’
item. This
simplification includes the removal of a distinction between loans and deposits on each side of the balance
sheet and the removal of the maturity breakdown. There is also a change in the presentation of the breakdown
(i.e. sector as first priority). This sectoral breakdown is compatible but not identical with the breakdown of the
BPM5 where instruments have priority.

NCBs are required to distinguish in their quarterly balance of payments statistics between transactions with
participating Member States and all other external transactions. As for the monthly data, a distinction between
transactions in securities issued by euro area residents and securities issued by non-euro area residents is required
for quarterly data in the areas of portfolio investment. The statistics on net transactions in portfolio investment
assets of the euro area are compiled by aggregating reported net transactions in securities issued by non-euro area
residents. Net transactions in portfolio investment liabilities of the euro area are compiled by consolidation of net
liabilities and net transactions in securities issued and purchased by euro area
transactions in total national
residents.

An analogous reporting requirement and compilation method for the aggregate data are applied for portfolio
investment income.

For direct investment NCBs are required to submit quarterly an ‘MFIs (excluding central banks)/non-MFIs’ sectoral
breakdown. For ‘portfolio investment assets’ and ‘other investment’ the breakdown of reports according to insti-
tutional sectors follows the standard components of
(ii) MFIs
(excluding central banks); (iii) general government; and (iv) other sectors.

the IMF comprising (i) monetary authorities;

For compiling the statistics on euro area net transactions in portfolio investment liabilities by sector of the euro
area resident issuers, the requirements for quarterly data are similar to those for monthly balance of payments.

For the balance of payments of the euro area, accrued investment income data are required on a quarterly basis. In
line with the System of National Accounts, the BPM5 recommends that interest should be recorded on an accruals
basis. This requirement affects the current account (investment income) as well as the financial account.

2.

International reserves template

O b j e c t i v e

The objective of the international reserves template is a monthly statement of the reserve assets, other foreign
currency assets and reserve related liabilities held by NCBs and the ECB following the presentation of the joint
IMF/Bank for International Settlements (BIS) template on ‘International Reserves and Foreign Currency Liquidity’.
This information complements the data on reserve assets included in the euro area balance of payments and
international investment position statistics.

R e q u i r e m e n t s

Reserve assets of the euro area are highly liquid, marketable and creditworthy claims held by the ECB (‘pooled
reserves’) and by the NCBs (‘unpooled reserve assets’) on non-euro area residents and denominated in foreign
currency (i.e. in currencies other than the euro), gold, reserve positions in the IMF and SDR holdings. They may
include positions in financial derivatives. Reserve assets are compiled on a gross basis without any netting out of
reserve-related liabilities. The breakdown of the data required from the NCBs is presented in Annex III, Table 3,
Section I.A.

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Foreign currency denominated assets of the Eurosystem which do not meet this definition, namely (i) claims on
euro area residents; and (ii) claims on non-euro area residents which do not meet the liquidity, marketability and
creditworthiness criteria, are included under the ‘other foreign currency assets’ item of the international reserves
template (Annex III, Table 3, Section I.B).

Euro-denominated claims on non-residents and balances in foreign currency held by governments of participating
Member States are not considered as reserve assets; such amounts are recorded as ‘other investment’
if they
represent claims on non-euro area residents.

In addition, information on predetermined and contingent short-term net drains on the Eurosystem connected to
reserve assets and other foreign currency assets of the Eurosystem, the so-called ‘reserve-related liabilities’, is to be
reported under Annex III, Table 3, Sections II to IV.

3.

International investment position statistics

O b j e c t i v e

The objective of the international investment position is an annual statement of the external assets and liabilities of
the euro area as a whole, for monetary policy and exchange market analysis. This statistical information may also
assist in the compilation of balance of payments flows.

R e q u i r e m e n t s

The ECB requires international investment position statistics in respect of end-of-calendar-year stock levels.

The international investment position data conform as far as possible to international standards. The ECB compiles
the international investment position for the euro area as a whole. The breakdown of the international investment
position for the euro area is presented in Annex III, Table 4.

The ECB may require on a quarterly basis items of particular significance for the conduct of monetary policy,
specifically those items within the ‘other investment’ account which are currently provided to the BIS for its
statistics on international banking.

investment position shows financial stocks at

The international
the end of the reference period, valued at
end-period prices. Changes in the value of stocks could be due to the following factors. First, part of the
change in the value during the reference period will be due to the financial transactions that have taken place
and been recorded in the balance of payments. Secondly, part of the changes in positions at the beginning and at
the end of a given period will be caused by changes in the prices of the financial assets and liabilities shown.
in the event that stocks are denominated in currencies other than the unit of account used for the
Thirdly,
international
investment position, changes in the exchange rates vis-à-vis other currencies will also affect the
values. Finally, any other change which is not due to the above factors will be considered as due to ‘other
adjustments’.

A proper reconciliation between the financial flows and stocks of the euro area requires changes in value owing to
price, to exchange rate changes and to other adjustments to be distinguished.

Coverage of the international investment position should be as close as possible to that for quarterly balance of
payments flows. The concepts, definitions and breakdowns are in line with those used for quarterly balance of
payments flows. As far as possible, data on the international investment position should be consistent with other
statistics, such as money and banking statistics, financial accounts and national accounts.

As for the monthly and quarterly balance of payments, NCBs are required to distinguish in their international
investment position statistics between holdings vis-à-vis participating Member States and all other external
positions. A distinction between holdings in securities issued by euro area residents and in securities issued by
non-euro area residents is required in the portfolio investment accounts. The statistics on net assets in portfolio
investment of the euro area are compiled by aggregating reported net assets in securities issued by non-euro area
residents. Statistics on net liabilities in portfolio investment of the euro area are compiled by consolidation of net
total national liabilities and net holdings in securities issued and purchased by euro area residents.

NCBs are required to submit annual holdings according to the same sectoral breakdown for ‘direct investment’,
‘portfolio investment assets’ and ‘other investment’ as for quarterly balance of payments flows.

For the ECB's compiling of a sectoral breakdown of the euro area net liabilities in portfolio investment, the
requirements imposed on NCBs regarding international investment position data are the same as for balance of
payments flows, subject to the provisions of Article 2(5) of the Guideline ECB/2003/7.

Portfolio investment assets and liabilities within the international investment position are compiled purely from
stock data.

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ANNEX III

REQUIRED BREAKDOWNS

Table 1

Monthly items for the balance of payments of the euro area

Credit

Debit

Net

I. Current account

Goods

Services

Income

Compensation of employees

Investment income

— direct investment

— portfolio investment

— other investment

Current transfers

II. Capital account

III. Financial account

Direct investment

Abroad

— Equity

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

In the reporting economy

— Equity

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

Net assets

Net liabilities

extra

extra

extra

extra

national

extra

extra

extra

Net

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

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Net assets

Net liabilities

Net

Portfolio investment

Equity securities

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

(i) Monetary authorities

extra (1)/intra (3)

—

(ii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iii) Non-MFIs

Debt securities

— Bonds and notes

extra (1)/intra (3)

national (2)

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

(i) Monetary authorities

extra (1)/intra (3)

—

(ii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iii) Non-MFIs

extra (1)/intra (3)

national (2)

— Money market instruments

extra (1)/intra (1)

national (2)

(i) Monetary authorities

extra (1)/intra (3)

—

(ii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iii) Non-MFIs

Financial derivatives

Other investment

Monetary authorities

General government

MFIs (excluding central banks)

— Long-term

— Short-term

Other sectors

Reserve assets

national

extra

extra (1)/intra (3)

national (2)

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

‘extra’:

means transactions with non-euro area residents (for portfolio investment assets and related income it refers to the residency of
the issuers)
means transactions between different Member States of the euro area

‘intra’:
‘national’: means all cross-border transactions by residents of a participating Member State (used only in connection with liabilities on

portfolio investment accounts and the net balance of the financial derivatives accounts)

(1) Breakdown by euro area resident holders.

(2) Breakdown by domestic resident issuers.

(3) Breakdown by euro area resident issuers.

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Table 2

Quarterly balance of payments of the euro area

Credit

Debit

Net

I. Current account

Goods

Services

Income

Compensation of employees

Investment income

— Direct investment

— Income on equity

— Income on debt (interest)

— Portfolio investment

— Income on equity (dividends)

— Income on debt (interest)

— Bonds and notes

— Money market instruments

— Other investment

Current transfers

II. Capital account

III. Financial account

Direct investment

Abroad

— Equity

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

In the reporting economy

— Equity

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

Net assets

Net liabilities

extra

extra

extra

extra

extra

extra

national

national

national

national

national

extra

extra

extra

Net

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

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Net assets

Net liabilities

Net

Portfolio investment

Equity securities

(i) Monetary authorities

(ii) General government

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

extra (1)/intra (3)

extra (1)/intra (3)

—

—

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

Debt securities

— Bonds and notes

(i) Monetary authorities

(ii) General government

extra (1)/intra (3)

national (2)

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

extra (1)/intra (3)

national (2)

extra (1)/intra (3)

national (2)

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

extra (1)/intra (3)

national (2)

— Money market instruments

extra (1)/intra (1)

national (2)

(i) Monetary authorities

(ii) General government

extra (1)/intra (3)

national (2)

extra (1)/intra (3)

national (2)

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

Financial derivatives

(i) Monetary authorities

(ii) General government

(iii) MFIs (excluding central banks)

(iv) Other sectors

Other investment

(i) Monetary authorities

— Loans/currency and deposits

— Other assets/liabilities

(ii) General government

— Trade credits

— Loans/currency and deposits

— Other assets/liabilities

(iii) MFIs (excluding central banks)

— Loans/currency and deposits

— Other assets/liabilities

(iv) Other sectors

— Trade credits

— Loans/currency and deposits

— Other assets/liabilities

Reserve assets

Monetary gold

Special drawing rights

Reserve position in the International Monetary
Fund (IMF)

extra (1)/intra (3)

national (2)

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

national

national

national

national

national

extra

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Net assets

Net liabilities

Net

Foreign exchange

— Currency and deposits

— With monetary authorities

— With MFIs (excluding central banks)

— Securities

— Equities

— Bonds and notes

— Money market instruments

— Financial derivatives

Other claims

(1) Breakdown by euro area resident holders.
(2) Breakdown by domestic resident issuers.
(3) Breakdown by euro area resident issuers.

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

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Monthly international reserves of the Eurosystem; reserve-related liabilities of the euro area

I. Official reserve assets and other foreign currency assets (approximate market value)

Table 3

A. Official reserve assets

(1) Foreign currency reserves (in convertible foreign currencies)

(a) Securities, of which:

— issuer headquartered in the euro area

(b) total currency and deposits with

(i) other national central banks, Bank of International Settlements (BIS) and IMF

(ii) banks headquartered in the euro area and located abroad

(iii) banks headquartered and located outside the euro area

(2) IMF reserve position

(3) SDRs

(4) Gold (including gold deposits and gold swaps)

(5) Other reserve assets

(a)

financial derivatives

(b) loans to non-bank non-residents

(c) other

B. Other foreign currency assets

(a) securities not included in official reserve assets

(b) deposits not included in official reserve assets

(c)

loans not included in official reserve assets

(d) financial derivatives not included in official reserve assets

(e) gold not included in official reserve assets

(f) other

II. Predetermined short-term net drains on foreign currency assets (nominal value)

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III. Contingent short-term net drains on foreign currency assets (nominal value)

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IV. Memo items

1. To be reported with standard periodicity and timeliness:

(a) short-term domestic currency debt indexed to foreign exchange rates

(b) financial instruments denominated in foreign currency and settled by other means (e.g. in domestic currency)

— non-deliverable forwards

(i) short positions

(ii) long positions

— other instruments

(c) pledged assets

— included in reserve assets

— included in other foreign currency assets

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(d) securities lent and on repo

— lent or repoed and included in Section I

— lent or repoed but not included in Section I

— borrowed or acquired and included in Section I

— borrowed or acquired but not included in Section I

(e)

financial derivative assets (net, marked to market)

— forwards

— futures

— swaps

— options

— other

(f) derivatives (forward, futures or options contracts) that have a residual maturity greater than one year, which

are subject to margin calls

— aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic

currency (including the forward leg of currency swaps)

(i) short positions

(ii) long positions

— aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency

(i) short positions

— bought puts

— written calls

(ii) long positions

— bought calls

— written puts

2. To be disclosed less frequently (e.g. once a year):

(a) currency composition of reserves (by groups of currencies)

— currencies in SDR basket

— currencies not included in SDR basket

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Table 4

Annual international investment position of the euro area

I. Direct investment

Abroad

— Equity and reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

In the reporting economy

— Equity and reinvested earnings

(i) MFIs (excluding central banks)

(ii) Non-MFIs

— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

II. Portfolio investment

Assets

Liabilities

Net

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

Equity securities

extra (1)/intra (1)

national (2)

(i) Monetary authorities

(ii) General government

extra (1)/intra (3)

extra (1)/intra (3)

—

—

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

Debt securities

— Bonds and notes

extra (1)/intra (3)

national (2)

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

(i) Monetary authorities

extra (1)/intra (3)

national (2)

(ii) General government

extra (1)/intra (3)

national (2)

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

extra (1)/intra (3)

national (2)

— Money market instruments

extra (1)/intra (1)

national (2)

(i) Monetary authorities

extra (1)/intra (3)

national (2)

(ii) General government

extra (1)/intra (3)

national (2)

(iii) MFIs (excluding central banks)

extra (1)/intra (3)

national (2)

(iv) Other sectors

extra (1)/intra (3)

national (2)

III. Financial derivatives

(i) Monetary authorities

(ii) General government

extra

extra

extra

extra

extra

extra

extra

extra

extra

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Net

extra

extra

extra

Assets

Liabilities

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

(iii) MFIs (excluding central banks)

(iv) Other sectors

IV. Other investment

(i) Monetary authorities

— Loans/currency and deposits

— Other assets/liabilities

(ii) General government

— Trade credits

— Loans/currency and deposits

— Other assets/liabilities

(iii) MFIs (excluding central banks)

— Loans/currency and deposits

— Other assets/liabilities

(iv) Other sectors

— Trade credits

— Loans/currency and deposits

— Other assets/liabilities

V. Reserve assets

Monetary gold

Special drawing rights

Reserve position in the IMF

Foreign exchange

— Currency and deposits

— With monetary authorities

— With MFIs (excluding central banks)

— Securities

— Equities

— Bonds and notes

— Money market instruments

— Financial derivatives

Other claims

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

‘extra’:

means positions with non-euro area residents (for portfolio investment assets and related income, it refers to the residency of
the issuers)
means positions between different Member States of the euro area

‘intra’:
‘national’: means all cross-border positions by residents of a participating Member State (used only in connection with liabilities on

portfolio investment accounts and the net balance of the financial derivatives accounts)

(1) Breakdown by euro area resident holders.

(2) Breakdown by domestic resident issuers.

(3) Breakdown by euro area resident issuers.

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ANNEX IV

CONCEPTS AND DEFINITIONS TO BE USED IN THE BALANCE OF PAYMENTS AND INTERNATIONAL
INVESTMENT POSITION STATISTICS, AND THE INTERNATIONAL RESERVES TEMPLATE

In order to construct meaningful aggregated external statistics for the euro area, concepts and definitions have been
defined in the field of balance of payments statistics (income, capital and financial accounts), international investment
position statistics and the international reserves template. These concepts and definitions are based on the so-called
Implementation Package (July 1996) and additional documents endorsed by the Governing Council of the European
Central Bank (ECB). Current international standards, such as the fifth edition of the International Monetary Fund (IMF)
Balance of Payments Manual (the ‘BPM5’) and the IMF/Bank for International Settlements template on International
Reserves and Foreign Currency Liquidity, have been used as a reference in formulating these concepts and definitions.
The most important harmonisation proposals are listed below in line with the ECB's methodological notes on ‘Balance of
payments and international
the euro area (including reserves)’ published on its website:
http://www.ecb.int. Further guidance is available in Chapters 2 and 3 of the ECB's publication ‘European Union
balance of payments/international investment position statistical methods’ (the ‘BoP Book’) which is annually revised
and is available both on the website and in hard copy.

investment position of

1. Concepts and definitions of selected items

1.1. Investment income (see also BoP Book Section 3.4.)

Investment income incorporates income derived from a euro area resident's ownership of a non-euro area financial
income derived from a non-euro area resident's ownership of a euro area
asset (credits) and, symmetrically,
financial asset (debits). Where separately identifiable, gains and losses on (capital) holdings are not classified as
income on investments, but as changes in the value of the investments due to market price developments.

Investment income includes income generated by direct investment, portfolio investment and other investment and
by the Eurosystem's reserve assets. However, net flows associated with interest rate derivatives are recorded under
‘financial derivatives’ in the financial account. Reinvested earnings are recorded under ‘direct investment income’.
They are defined as the direct investor's share of the total consolidated profits earned by the direct investment
enterprise in the given reference period (after allowing for tax, interest and depreciation) less dividends due for
payment in the reference period, even if these dividends relate to profits earned in previous periods.

The requirements for monthly and quarterly balance of payments data are almost identical to IMF Standard
Components as defined in the BPM5. The main difference is that the ECB does not require a breakdown of
direct investment income on equity into distributed and undistributed profits.

Interest income is recorded on an accruals basis (this is not required for the monthly data). Dividends are recorded
as of the date on which they become payable. Reinvested earnings are to be recorded in the period in which they
are earned.

1.2. Capital account (see also BoP Book Section 3.6.)

transfers are to be recorded in the current account. Capital

The capital account covers capital transfers and the acquisition/disposal of non-produced non-financial assets.
Current
transfers of
ownership of fixed assets; (ii) transfers of funds linked to, or conditional upon, the acquisition or disposal of
fixed assets; and (iii) the cancellation, without any consideration being received in return, of liabilities by creditors.
Capital transfers may be in cash or in kind (such as debt forgiveness). The distinction between current and capital
transfers, in practice, rests in the use of the transfer by the recipient country. Acquisition/disposal of non-produced
non-financial assets covers mainly intangibles such as patents,
leases or other transferable contracts. Only the
purchase/sale of such assets, but not their use, is to be recorded in this item of the capital account.

transfers consist of

(i)

While the IMF's standard components of the capital account consist of a sectoral breakdown into the items ‘general
government’ and ‘other sectors’ (with a further breakdown thereafter), the ECB compiles only a lump-sum capital
account, without any breakdown.

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1.3. Direct investment (see also BoP Book Section 3.7.)

Direct investment is a category of international investment that reflects the objective of an entity resident in one
economy to obtain a lasting interest in an enterprise resident in another economy. In line with international
standards (IMF), the ‘10 % ownership criterion’ is applied in order to infer the existence of a direct investment
investment
i.e. a lasting interest in the case of the euro area balance of payments/international
relationship,
position. Based on this criterion, a direct investment relationship can exist between a number of related enterprises,
regardless of whether the linkage involves a single chain or a number of chains. It can extend to a direct investment
enterprise's subsidiaries, sub-subsidiaries and associates. Once the direct investment is established, all subsequent
financial
transactions/
positions (1).

flows/holdings between/vis-à-vis the related entities are recorded as direct

investment

Following the IMF standards and Eurostat/OECD guidelines, direct investment relationships of the euro area are
recorded using the directional principle, implying that the financial transactions between the euro area resident
direct investor and the non-euro area direct investment enterprises are classified as ‘direct investment abroad’.
Symmetrically, the financial transactions between resident direct investment enterprises and non-euro area direct
investors are classified under the ‘direct investment in the reporting economy’ item of the euro area balance of
payments.

The components of direct investment are equity capital, reinvested earnings and ‘other capital’ associated with
various inter-company debt operations. Equity capital comprises equity in branches as well as all shares in
subsidiaries and associates. Reinvested earnings consist of the off-setting entry to the direct investor's share of
earnings not distributed as dividends by subsidiaries or associates and earnings of branches not remitted to the
direct investor and which are recorded under ‘investment income’. ‘Other capital’ covers all financial operations
between affiliated companies (borrowing and lending of funds) — including debt securities and suppliers' credits
(i.e. trade credits) — between direct investors and subsidiaries, branches and associates.

With regard to the valuation of direct investment stocks, the internationally recommended approach is to use
market prices. However, owing to practical difficulties, compilers are currently using book values based on the
volume of own funds of the companies involved. The criteria for the valuation of direct investment stocks in the
euro area international investment position are the stock exchange price for listed companies, whereas non-listed
companies are valued on the basis of their own funds (i.e. book values) using a common definition comprising the
following accounting items:

(i) paid-up capital (excluding own shares and including shares premium accounts);

(ii) all types of reserves (including investment grants when accounting guidelines consider them as company's

reserves); and

(iii) non-distributed profits net of losses (including results for the current year).

1.4. Portfolio investment (see also BoP Book Section 3.8.)

The euro area portfolio investment account includes (i) equity securities; and (ii) debt securities in the form of
bonds and notes and money market instruments, unless they are categorised either as direct investment or as
reserve assets. Financial derivatives as well as repurchase agreements and securities lending are excluded from portfolio
investment.

The ‘equity securities’ item covers all instruments representing claims on the residual value of incorporated enter-
prises after the claims of all creditors have been met. Stocks, shares, preference stocks or shares, participation
certificates or similar documents, denote ownership of equity. Transactions/holdings of shares of collective
investment institutions, e.g. investment funds, are also included.

Bonds and notes are securities issued with an initial maturity of more than one year which usually give the holder
(i) the unconditional right to a fixed monetary income or contractually determined variable monetary income
(payment of interest being independent of the earnings of the debtor); and (ii) the unconditional right to a fixed
sum in repayment of principal on a specified date or dates.

(1) Exceptions relate to transactions/positions in financial derivatives between affiliates for which recording under the category ‘financial

derivatives’ rather than under ‘direct investment/other capital’ was agreed at the euro area level.

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Unlike bonds and notes, money market instruments are securities issued with an initial maturity of one year or less.
They generally give the holder the unconditional right to receive a stated, fixed sum of money on a specified date.
These instruments are usually traded, at a discount, in organised markets; the discount is dependent upon the
interest rate and the time remaining to maturity.

The report by the Task Force on Portfolio Investment Data Collection Systems was published by the ECB in June
2002. In-depth investigation was carried out on the need for and potential benefit of steps towards harmonisation
of portfolio investment collection systems. Some findings are included to identify adequate (‘ideal’,
‘good’ or
‘acceptable’) and conversely inadequate (‘not acceptable’) data collection models, and to assess their merits (in
particular of security-by-security reporting) and costs in qualitative terms. Participating Member States have
agreed to adopt an adequate data collection system as from 1 January 2005, with one of them having made a
reservation (regarding the schedule for the collection of stock data).

The recording of portfolio investment transactions in the euro area balance of payments takes place when the euro
area creditors or debtors enter the claim or liability in their books. Transactions are recorded at the effective price
received or paid, less commission and expenses. Thus, in the case of securities with coupons, the interest accrued
from the last payment of interest is included and, in that of securities issued at a discount, the interest accumulated
since the issue is included. Inclusion of interest accrued is required for the financial account of the quarterly
balance of payments and the international investment position; in the monthly balance of payments the same
treatment is encouraged; these recordings in the quarterly (and monthly) financial account need to have offsetting
entries in the respective income account.

1.5. Financial derivatives (see also BoP Book Section 3.9.)

Financial derivatives are financial
indicator or
commodity, and through which specific financial risks can be traded in financial markets in their own right.
Transactions in financial derivatives are treated as separate transactions rather than as integral parts of the value of
underlying transactions to which they may be linked.

instruments that are linked to a specific financial

instrument,

Transactions and positions in options, futures, swaps, forward foreign exchange contracts, credit derivatives and
embedded derivatives are recorded in the balance of payments, international reserves and international investment
position. For practical reasons, embedded derivatives are not distinguished from the underlying instrument to
which they are linked.

Net flows associated with interest rate derivatives are recorded as financial derivatives, not as investment income, in
line with recent international agreement. The classification of specific instruments of credit derivatives should be
decided on a case-by-case basis.

Initial margin payments are regarded as changes in deposits and should be recorded, if identifiable, under ‘other
the variation margin:
investment’. The treatment of variation margin payments depends on the form of
options-style variation margins are regarded,
if
identifiable, under ‘other investment’. Futures-style variation margin payments are regarded, in principle, as trans-
actions in derivatives and should be recorded under ‘financial derivatives’.

in principle, as changes in deposits and should be recorded,

In the case of options, the full premium (i.e. the purchase/sale price of the options and the implied service charge)
is recorded.

The valuation of financial derivatives should be conducted on a marked-to-market basis.

The recording of transactions in financial derivatives takes place when the euro area creditors and debtors enter the
claim or liability in their books. Owing to practical problems involved in separating the asset and liability flows for
some derivative instruments, all financial derivatives transactions in the euro area balance of payments are recorded
net. Financial derivative asset and liability positions in the international investment position statistics are recorded
on a gross basis, with the exception of those financial derivatives falling into the category of reserve assets, which
are recorded on a net basis.

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1.6. Other investment (see also BoP Book Section 3.10.)

Other investment is defined as a residual category that includes all financial transactions not covered in the direct
investment, portfolio investment, financial derivatives or reserve assets categories.

Other investment covers trade credits,
loans/currency and deposits and other assets/other liabilities.
encompasses the offsetting entries for accrued income on instruments classified under other investment.

It also

Trade credits consist of claims or liabilities arising from the direct extension of credit by euro area suppliers or
buyers respectively for transactions in goods and services and advance payments for work in progress (or to be
undertaken) that is associated with such transactions.

instruments:
i.e.
Loans/currency and deposits comprise transactions/holdings in the following financial
financial assets created through the direct
to a debtor (borrower)
through an arrangement in which the lender either receives no security or receives a non-negotiable document
or instrument, repo-type operations, currency and deposits. This includes, inter alia, loans to finance trade, other
loans and advances (including mortgages) and financial leases.

funds by a creditor (lender)

lending of

loans,

All repo-type operations, i.e. repurchase agreements, sell/buy-back operations and securities lending, are treated in
the euro area balance of payments/international
investment position as collateralised loans, not as outright
purchases/sales of securities, and are recorded under ‘other investment’, within the euro area resident sector that
carries out the operation. This treatment, which is also in line with the accounting practice of banks and other
instruments.
financial corporations,

is intended to better reflect the economic rationale behind these financial

Other assets/other liabilities covers all items other than trade credits, loans and currency and deposits.

The euro area sector ‘Eurosystem’ in ‘other investment’ includes net positions of the Eurosystem with the national
central banks (NCBs) of non-participating Member States related to the operation of the TARGET system. These
intra-European System of Central Banks (ESCB) balances/accounts, which are denominated in euro, are similar to
movements of the monetary financial institutions' (MFIs') nostro/vostro accounts and, thus, reported to the ECB on
a net basis under liabilities.

The principles of ‘transfer of ownership’,
standards.

‘time of settlement’ and ‘time of payment’ all conform to the IMF

Compared with BPM5 standard components, presentation of the ‘other investment’ category of the euro area
balance of payments is simplified by omitting the distinction between loans and deposits on each side of the
balance sheet and the omission of the maturity breakdown for quarterly balance of payments statistics. There is
also a change in the presentation of the breakdown (i.e. sector as first priority). This sectoral breakdown is
compatible but not
the BPM5 where instruments have priority. For the
monthly balance of payments data, a distinction between short-term and long-term flows in the MFI sector is
required.

identical with the breakdown of

1.7. Reserve assets (see also BoP Book Section 3.11.)

The reserve assets of the euro area consist of the Eurosystem's reserve assets, i.e. the ECB's and the NCBs' reserve
assets.

Reserve assets must (i) be under the effective control of the relevant monetary authority of the Eurosystem or an
NCB; and (ii) be highly liquid, marketable and creditworthy claims held by the Eurosystem on non-euro area
residents denominated in currencies other than the euro, gold, reserve positions in the IMF or special drawing
rights (SDRs).

This definition expressly excludes foreign currency claims on residents of the euro area, and euro claims on
non-residents of the euro area, from being considered to be reserve assets either at the national or at the euro
area level. Likewise, foreign exchange positions of central governments and/or the Treasury are not included in the
definition of reserve assets for the euro area in accordance with the institutional arrangements in the Treaty
establishing the European Community.

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Reserve assets of the ECB are those assets which are pooled in accordance with Article 30 of the Statute of the
ESCB and thus considered to be under the direct and effective control of the ECB. As long as no further transfer of
ownership takes place, reserve assets retained by the NCBs are under their direct and effective control and are
treated as reserve assets of each individual NCB.

The presentation of the Eurosystem's international reserves transactions shows a total figure for monthly trans-
actions. Additional details of Eurosystem transactions in gold, foreign exchange, holdings of SDRs and reserve
position in the IMF are available quarterly following BPM5 standard components. A separate category for financial
derivatives is presented, in line with the recent IMF recommendation in this field.

The Eurosystem's reserves are compiled on a gross basis without any netting-off of reserve-related liabilities (with
the exception of those reserve assets included in the sub-category ‘financial derivatives’, which are recorded on a net
basis).

The valuation is based on market prices by using (i) for transactions, the prevailing market prices at the time when
the transaction takes place; and (ii) for holdings, the closing mid-market prices at the end of the appropriate period.
Prevailing market exchange rates at the time when the transaction takes place and closing mid-market prices at the
end of the appropriate period are respectively used for the conversion of transactions and holdings of foreign
currency-denominated assets into euro.

Income on reserve assets is to be recorded indistinguishably under the ‘other investment’ item of the investment
income account, including interest income on reserve holdings of debt securities, and on an accruals basis at least
quarterly.

The view that usable reserves might be a more important indicator of a country's ability to meet its foreign exchange
obligations than gross reserves as shown in the balance of payments and international investment position statistics
has become more widespread and has been adopted in the IMF's Special Data Dissemination Standard. To calculate
usable reserves, data on gross reserves need to be supplemented with information about other foreign currency
assets and reserve-related liabilities. Accordingly, monthly data on (gross) reserve assets of the Eurosystem are
supplemented with information on other foreign currency assets and predetermined and contingent short-term
net drains on the gross reserve assets classified according to residual maturity. Moreover, a currency distinction
between gross reserve assets denominated in SDR currencies (in total) and other currencies (in total) with a
quarter's lag is also required.

Regarding specific items, holdings of monetary gold should remain unchanged in all reversible gold transactions
(gold swaps, repos,
loans and deposits). Repo transactions in foreign currency-denominated securities result in
increases in the total amount of the reserve assets of the cash-borrowing NCB owing to the fact that the repoed
securities still remain on the balance sheet; in the case of reverse repos, the cash-lending monetary authority does
not register any variation in the total amount of reserve assets if the non-resident counterpart is another monetary
authority or financial institution, owing to the fact that the claim on the cash borrower is then regarded as a
reserve asset.

Territories belonging to, or countries associated with, euro area Member States

Table 5

Territories forming part of the euro area:

— Helgoland: Germany,

— Balearic Islands, Canary Islands, Ceuta and Melilla: Spain,

— Monaco, French Overseas Departments (Guyana, Guadeloupe, Martinique and Réunion), Saint Pierre and

Miquelon, Mayotte: France,

— Madeira, the Azores: Portugal,

— The Åland Islands: Finland.

Territories associated with euro area Member States to be included in the ‘rest of the world’:

— Büsingen (not Germany),

— Andorra (neither Spain nor France),

— The Netherlands Antilles and Aruba (not the Netherlands),

— French Overseas Territories (French Polynesia, New Caledonia and the Wallis and Futuna Islands) (not France),

— San Marino and the Vatican City (not Italy).

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2.

Implementation methods for geographical allocation

Difficulties in the compilation of geographically broken down balance of payments and international investment
position statistics are resolved by means of a step-by-step approach. This approach involves three steps towards
meeting data requirements, which are progressively more demanding. The items ‘portfolio investment’, ‘income on
portfolio investment’ and ‘financial derivatives’ are particularly important.

2.1. General approach (to be applied for all accounts of the balance of payments and international investment position — with the

exceptions listed below)

S t e p 1

Compilation method at the euro area level: addition of national total net transactions/positions.

Implemented since 1999 for international investment positions.

S t e p 2

Compilation method at the euro area level: separate addition of transactions/positions with non-residents for credits
and debits or net assets and net liabilities (balance of payments)/assets and liabilities (international investment
position).

Data requirements at the NCB level: separate identification of transactions/positions between euro area and
non-euro area residents.

Implemented since January 1999 for balance of payments.

Implemented since end-September 2002 for international investment position.

S t e p 3

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the
addition of a geographical breakdown (see Table 6) within non-euro area transactions/positions. Step 3 is only
necessary for quarterly balance of payments and international investment position statistics.

Data requirements at the NCB level: separate identification of transactions/positions between euro area residents
and residents of countries in the agreed list of counterpart countries/regions contained in Table 6.

Deadline for implementation for quarterly balance of payments: end-June 2004 — data referring to first quarter of
2003.

Deadline for implementation for international
end-2002 and end-2003.

investment position: end-September 2004 — data referring to

2.2. Portfolio investment account

S t e p 1

Compilation method at the euro area level: addition of national total net portfolio investment transactions/
positions.

Implemented since 1999 for international investment position.

S t e p 2

Compilation method at the euro area level: addition of net transactions/positions in securities issued by non-euro
area residents for portfolio investment assets. Consolidation of net transactions/positions in total national liabilities
and transactions/positions in securities issued and purchased by euro area residents for portfolio investment
liabilities.

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Data requirements at the NCB level: transactions/positions in portfolio investment assets broken down into trans-
actions/positions in euro area securities issued by euro area residents and other securities. To achieve this it is
necessary to identify the issuer (debtor) of the security in order to establish whether the issuer is a euro area
resident or a non-resident. For transactions/positions in portfolio investment liabilities, only national total net
figures are required.

Portfolio investment positions within the international investment position shall be compiled purely from stock
data related to end-of-year holdings of equity and short and long-term debt securities issued by non-euro area
residents, taking advantage of the fact that the data requirements established by the ECB are fully consistent with
participation in the IMF's Coordinated Portfolio Investment Survey.

Implemented since January 1999 for portfolio investment transactions.

Implemented since end-September 2002 for portfolio investment stocks.

S t e p 3

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the
addition of a geographical breakdown (see Table 6) within non-euro area transactions/positions on the asset side.
No geographical breakdown into non-euro area transactions/positions is required for the liabilities side. Step 3 is
only necessary for quarterly statistics on transactions and annual statistics on positions.

Data requirements at the NCB level: separate identification of assets in portfolio investment transactions/positions
between euro area residents and residents of countries in the agreed list of counterpart countries/regions contained
in Table 6.

Deadline for implementation for quarterly portfolio investment transactions: end-June 2004 — data referring to
first quarter of 2003.

Deadline for implementation for portfolio investment positions (asset side only): end-September 2004 — data
referring to end 2002 and end-2003.

2.3. Portfolio investment income account

S t e p 1

Compilation method at the euro area level: addition of national total net investment income transactions.

S t e p 2

Compilation method at
investment assets issued by non-residents. Consolidation of
national net liabilities and credit transactions derived from securities issued by euro area residents.

the euro area level: addition of

transactions derived from portfolio
transactions derived from total

income credit

income debit

Data requirements at the NCB level: credit transactions in portfolio investment income broken down into trans-
actions derived from securities issued by euro area residents and from securities issued by residents of other
countries. To achieve this it is necessary to identify the issuer (debtor) of the security in order to establish
whether the issuer is a euro area resident or a non-resident. For debit transactions derived from portfolio
investment liabilities, only national total figures are required.

Implemented since January 2000.

S t e p 3

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the
addition of a geographical breakdown within non-euro area credit transactions. No geographical breakdown into
non-euro area income transactions is required for the debit side. Step 3 is only necessary for quarterly balance of
payments statistics.

Data requirements at the NCB level: separate identification of credits in portfolio investment income transactions
between euro area residents and residents of countries in the agreed list of counterpart countries/regions of Table 6.

Deadline for implementation for quarterly portfolio investment income transactions: end-June 2004 — data
referring to first quarter of 2003.

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2.4. Financial derivatives account

Transactions

S t e p 1

The requirements for transactions in financial derivatives with non-euro area counterparts only comprise a net
presentation of this item.

Compilation method at the euro area level: addition of national total net transactions in financial derivatives.

Positions

S t e p 1

Compilation method at the euro area level: addition of national total net positions in financial derivatives.

Implemented since 1999.

S t e p 2

Compilation method at the euro area level: separate addition of net positions in financial derivatives with
non-residents on the asset and liabilities side.

Data requirements at the NCB level: separate identification of positions between euro area residents and positions
with non-euro area residents as defined by the location of the market where relevant, or the actual counterpart for
over-the-counter financial derivatives.

Implemented end-September 2002.

S t e p 3

A geographical breakdown within non-euro area positions in financial derivatives is not required.

Table 6

ECB geographical breakdowns for quarterly balance of payments flows and annual

international

investment position data

— Denmark

— Sweden

— United Kingdom

— European Union institutions

— ‘Acceding countries’

(i.e. Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,

Slovakia and Slovenia) (1)

— Switzerland

— Canada

— United States

— Japan

— Offshore centres (2)

— International organisations (2) (3)

— Rest of the world (i.e. countries and organisations outside the euro area not mentioned in the list) (4)

(1) The countries are listed in the brackets only to show the composition of this specific group, no breakdown by these countries is

required.

(2) Only for selected items of the balance of payments financial account, the related income accounts and the international

investment position. See Table 7.

(3) Outside the European Union. See Table 8. The organisations are listed only to show the composition of this specific group, no

breakdown by these organisations is required.

(4) Calculated as residual (the amounts between the total of each balance of payments/international investment position heading

and the amounts corresponding to the above-listed counterparts).

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3. Classification by institutional sector in the euro area aggregates (See also Bop Book Section 3.1.6.)

The sectoral breakdown of euro area aggregates comprises monetary authorities, general government, MFIs and
other sectors of the euro area.

Monetary authorities

The ‘monetary authorities’ sector of the euro area statistics consists of the Eurosystem.

General government

The ‘general government’ sector of the euro area statistics is consistent with the definition of that sector in the SNA
93 and ESA 95 and thus comprises the following units:

— central government,

— state/regional government,

— local government,

— social security funds.

MFIs excluding monetary authorities

This ‘MFIs excluding monetary authorities’ sector coincides with the MFI sector for money and banking statistics
(excluding monetary authorities). It comprises:

(i) credit institutions as defined by Community law, i.e. undertakings whose business is to receive deposits or other
repayable funds from the public (including the proceeds arising from the sales of bank bonds to the public) and
to grant credit for their own account; and

(ii) 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
to make investments in securities.

Other sectors

The ‘other sectors’ category of the euro area statistics comprises a variety of institutional units, mainly:

(i) other financial institutions not included in the MFI definition, such as collective investment institutions not
deemed to be money market funds, real estate investment institutions, securities dealers, mortgage credit
institutions, insurance corporations, pension funds and financial auxiliaries; and

(ii) non-financial institutions, such as public and private non-financial enterprises, non-profit institutions serving

households, and households.

Non-MFIs

The ‘non-MFIs sectors’ category of the euro area statistics comprises the sectors (i) ‘general government’ and (ii)
‘other sectors’.

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List of off-shore centres for the ECB geographical breakdown for quarterly balance of payments flows and
annual international investment position data

Table 7

ISO codes

AD

AG

AI

AN

BB

BH

BM

BS

BZ

CK

DM

GD

GG

GI

HK

IM

JE

JM

KN

KY

LB

LC

LI

LR

MH

MS

MV

NR

NU

PA

PH

SG

TC

VC

VG

VI

VU

WS

Eurostat + OECD
Offshore financial centers

Andorra

Antigua and Barbuda

Anguilla

Netherlands Antilles

Barbados

Bahrain

Bermuda

Bahamas

Belize

Cook Islands

Dominica

Grenada

Guernsey

Gibraltar

Hong Kong

Isle of Man

Jersey

Jamaica

Saint Kitts and Nevis

Cayman Islands

Lebanon

Saint Lucia

Liechtenstein

Liberia

Marshall Islands

Montserrat

Maldives

Nauru

Niue

Panama

Philippines

Singapore

Turks and Caicos Islands

Saint Vincent and the Grenadines

Virgin Islands, British

Virgin Islands, U.S.

Vanuatu

Samoa

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List of international organisations (1) for the ECB geographical breakdown for quarterly balance of
payments flows and annual international investment position data

Table 8

1.

European Union institutions

1.1. Major European Union institutions, organs and organisms (excluding the ECB)

EIB (European Investment Bank)

EC (European Commission)

EDF (European Development Fund)

EIF (European Investment Fund)

1.2. Other European Union institutions, organs and organisms covered by the general budget

European Parliament

Council of the European Union

Court of Justice

Court of Auditors

Economic and Social Committee

Committee of the Regions

2.

International organisations

2.1.

International monetary organisations

IMF (International Monetary Fund)

BIS (Bank for International Settlements)

2.2.

International non-monetary organisations

2.2.1. M a j o r U n i t e d N a t i o n s o r g a n i s a t i o n s

WTO (World Trade Organisation)

IBRD (International Bank for Reconstruction and Development)

IDA (International Development Association)

2.2.2. O t h e r U n i t e d N a t i o n s o r g a n i s a t i o n s

UNESCO (United Nations Educational, Scientific and Cultural Organisation)

FAO (Food and Agriculture Organisation)

WHO (World Health Organisation)

IFAD (International Fund for Agricultural Development)

IFC (International Finance Corporation)

MIGA (Multilateral Investment Guarantee Agency)

UNICEF (United Nations Children's Fund)

UNHCR (United Nations High Commissioner for Refugees)

UNRWA (United Nations Relief and Works Agency for Palestine)

IAEA (International Atomic Energy Agency)

ILO (International Labour Organisation)

ITU (International Telecommunication Union)

(1) Based on the European Commission (Eurostat) BoP vademecum.

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2.2.3. O t h e r m a j o r i n t e r n a t i o n a l

i n s t i t u t i o n s , o r g a n s a n d o r g a n i s m s ( e x c l u d i n g t h e

E C B )

OECD (Organisation for Economic Co-operation and Development)

IADB (Inter-American Development Bank)

AfDB (African Development Bank)

AsDB (Asian Development Bank)

EBRD (European Bank for Reconstruction and Development)

IIC (Inter-American Investment Corporation)

NIB (Nordic Investment Bank)

IBEC (International Bank for Economic Co-operation)

IIB (International Investment Bank)

CDB (Caribbean Development Bank)

AMF (Arab Monetary Fund)

BADEA (Banque arabe pour le développement économique en Afrique)

CASDB (Central African States Development Bank)

African Development Fund

Asian Development Fund

Fonds spécial unifié de développement

CABEI (Central American Bank for Economic Integration)

ADC (Andean Development Corporation)

2.2.4. O t h e r i n t e r n a t i o n a l o r g a n i s a t i o n s

NATO (North Atlantic Treaty Organisation)

Council of Europe

ICRC (International Committee of the Red Cross)

ESA (European Space Agency)

EPO (European Patent Office)

EUROCONTROL (European Organisation for the Safety of Air Navigation)

EUTELSAT (European Telecommunications Satellite Organisation)

INTELSAT (International Telecommunications Satellite Organisation)

EBU/UER (European Broadcasting Union/Union européenne de radio-télévision)

EUMETSAT (European Organisation for the Exploitation of Meteorological Satellites)

ESO (European Southern Observatory)

ECMWF (European Centre for Medium-Range Weather Forecasts)

EMBL (European Molecular Biology Laboratory)

CERN (European Organisation for Nuclear Research)

IOM (International Organisation for Migration)

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TRANSMISSION OF THE DATA TO THE EUROPEAN CENTRAL BANK

ANNEX V

The national central banks (NCBs) use the facility provided by the European System of Central Banks (ESCB), which
relies upon the telecommunications network ‘ESCB-Net’, for the electronic transmission of the statistical information
required by the European Central Bank (ECB). All exchanges of data within the ESCB use the same conceptual data
model. The statistical message format developed for this electronic exchange of statistical information is the ‘GESMES/TS’
format. This requirement does not prevent the use of some other means of transmitting statistical information to the
ECB as an agreed fall back solution.

NCBs observe the recommendations listed below in order to ensure that data transmission functions satisfactorily.

— Completeness: NCBs report all required series keys. Reporting no series keys or non-listed series keys will be
considered as incomplete reporting. Should an observation be missing, the omission is recorded using the corre-
sponding observation status flag. In addition, when revisions are made to only a sub-set of series keys, the validation
rules should be applied to the whole balance of payments.

— Sign convention: the data transmission by NCBs to the ECB as well as to the European Commission (Eurostat)
follows a uniform sign convention for all data which are to be reported. Under this sign convention, credits and
debits in the current and capital account must be reported with a plus sign, whilst net balances are to be calculated
and reported as credits minus debits. In the financial account, decreases in net assets/increases in net liabilities must
be reported with a plus sign, whereas increases in net assets/decreases in net liabilities must be reported with a
minus sign. Net balances are to be calculated and reported as net changes in assets plus net changes in liabilities.

In transmitting international investment position data, the net positions should be calculated and reported as asset
position minus liability position.

— Accounting identities of the data: the validation rules which were distributed and which are available on request

must be implemented by the NCBs before the data are transmitted to the ECB.

Whenever revisions occur, NCBs may send an updated dataset to the ECB. Any revisions should be transmitted as
follows:

— revisions for monthly data are made available with the submission of (i) the corresponding quarterly data; (ii) the
corresponding revised quarterly data; (iii) the international investment position data for the corresponding year; and
(iv) the revised international investment position data for the corresponding year,

— revisions for quarterly data are made available with the submission of (i) the data for the following quarter; (ii) the
investment

investment position data for the corresponding year; and (iii) the revised international

international
position data for the corresponding year,

— revisions for annual international investment position data are made available with the submission of the data for

following years.

Revisions for monthly and quarterly balance of payments data relating to full years shall be made available by the NCBs
to the ECB with the submission of international investment position data for the year to which the data relate.

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ANNEX VI

MONITORING OF STATISTICAL COMPILATION METHODS

The European Central Bank (ECB) monitors the compilation methods used for the reporting of the balance of payments
and international investment position statistics, as well as the concepts and definitions applied on a regular basis by the
participating Member States. The monitoring will be carried out in connection with the updating of the ECB's publi-
cation European Union balance of payments/international investment position statistical methods (the ‘BoP Book’), and by the
‘Six-monthly review’ procedure. Besides the monitoring purpose, both documents aim at informing the euro area
balance of payments compilers about developments in other euro area Member States.

The BoP Book contains information on the structure of balance of payments and international investment position
statistics for all Member States. There are detailed descriptions of data compilation methods and of the concepts and
definitions applied, as well as information on departures from the agreed definitions for the balance of payments and
international investment position statistics in the Member States.

The BoP Book is updated on an annual basis in close cooperation with the Member States. The six-monthly review is
carried out to complement this updating.

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ANNEX VII

DATA COLLECTION IN THE AREA OF PORTFOLIO INVESTMENT

Given the inherent difficulties in the correct identification of portfolio investment flows and stocks, it was considered
necessary to define common approaches for the collection of this information across the euro area (1).

Portfolio investment collection systems conform to a model classified at least as ‘acceptable’ in the following table:

(1) Monthly flows [s-b-s] + monthly stocks [s-b-s]

(2a) Monthly flows [s-b-s] + quarterly stocks [s-b-s]

(2b) Monthly flows [s-b-s] + annual stocks [s-b-s]

Ideal

Good

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

Quarterly stocks [s-b-s] + monthly flows [agg.]

Acceptable

Monthly stocks [agg.] + monthly flows [agg.]

Monthly stocks [s-b-s] + derived monthly flows [s-b-s]

Annual stocks [s-b-s] + monthly flows [agg.]

Quarterly stocks [agg.] + monthly flows [agg.]

Derived annual stocks [s-b-s] + monthly flows [s-b-s]

Not acceptable

Quarterly stocks [s-b-s] + derived quarterly flows [s-b-s] +
estimated monthly flows [agg.]

Annual stocks [s-b-s] + quarterly flows [agg.] + estimated
monthly flows [agg.]

Quarterly stocks
estimated monthly flows [agg.]

[agg.] + quarterly flows

[agg.] +

Derived annual stocks [agg.] + monthly flows [agg.]

Notes:
‘s-b-s’
‘agg.’
‘derived stocks’
‘derived flows’
‘estimated flows’ = split by months estimated from quarterly flows

= security by security data collection
= data collection on an aggregated basis
= cumulation of flows
= as difference of stocks (adjusted for exchange rate and price changes)

(1) See also the ECB report Task Force on Portfolio Investment Collection Systems,

final report,

June 2002 published on its website:

http://www.ecb.int