Guideline 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/2003/7)
Date: 2003-05-02
Institutions: European Central Bank
Subjects: European Central Bank, balance of payments, data transmission, foreign-exchange reserves, statistics

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EUROPEAN CENTRAL BANK

GUIDELINE 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/2003/7)

(2003/381/EC)

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, Article 12.1 and Article 14.3 thereof,

collection of statistical
information by the European
Central Bank (1) 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.

Whereas:

(1)

(2)

(3)

To fulfil its tasks, the European System of Central Banks
(ESCB) requires comprehensive and reliable balance of
payments and international
investment position statis-
tics, and the international reserves template, showing the
main items affecting monetary conditions and exchange
markets in the euro area.

Article 5.1, first sentence, of the Statute requires the
European Central Bank (ECB), assisted by the national
central banks (NCBs), to collect either from the compe-
tent 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, second sentence, provides that for these purposes it
shall cooperate with the Community institutions or
bodies and with the competent authorities of
the
Member States or third countries and with international
organisations. Article 5.2 stipulates that the NCBs shall
carry out, to the extent possible, the tasks described in
Article 5.1.

Information necessary to meet the ECB's requirements in
the field of balance of payments and international invest-
collected and/or
ment position statistics may be
compiled by competent authorities other than NCBs.
Therefore, some of the tasks to be undertaken under this
Guideline 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

(4)

(5)

as

statistical

expertise,

in particular

Part of the necessary statistical information relates to the
financial account of the balance of payments, the related
income and the international
investment position for
which the Eurosystem has prime responsibility. In order
to be able to fulfil their obligation to assist the ECB in
this area, the NCBs should be equipped with the neces-
sary
regards
concepts, methodology and data collection, compilation,
analysis and transmission. In Ireland the Central Statistics
Office (CSO) collects and compiles the relevant statistical
information. In order to meet the statistical requirements
of the ECB, the Central Bank of Ireland and the CSO
have to cooperate with each other as laid down in
Recommendation
statistical
reporting requirements of the European Central Bank in
the field of balance of payments and international invest-
ment position statistics, and the international reserves
template (2). In Italy, the Ufficio Italiano dei Cambi
is
responsible, jointly with the Banca d'Italia, for collecting
and compiling the relevant statistical information.

ECB/2003/8

the

on

Since the adoption of Guideline ECB/2000/4 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
investment position statistics (3), the
and international
exchange of statistical information within the ESCB has
therefore necessary to
developed significantly.
replace Guideline ECB/2000/4 with the present Guide-
line.

is

It

(1) OJ L 318, 27.11.1998, p. 8.
(2) OJ C 126, 28.5.2003.
(3) OJ L 168, 23.6.2001, p. 25.

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(6)

(7)

(8)

(9)

in the
As mentioned in Regulation (EC) No 2533/98,
early years of the single currency area cost-effectiveness
may require the ECB's statistical reporting requirements
to be satisfied through transitional procedures due to
existing constraints on the collection systems. This
in the case of the portfolio
implies in particular that,
investment income account, and the portfolio invest-
ment account of the balance of payments and of the
international investment position, data on cross-border
the euro area may be
transactions or positions of
compiled using all
transactions or positions between
euro area residents and residents of other countries.
Moreover, given the inherent difficulties in the correct
identification of cross-border portfolio investment flows
common
and
approaches for the collection of this information across
the euro area have been developed and will be imple-
mented in the coming years. Portfolio investment collec-
tion systems should conform to a common standard as
laid down in Annex VI by 1 January 2005.

income

related

stocks

flows,

and

Reporting of data on transactions and positions in the
assets and/or liabilities of euro area residents vis-à-vis
residents of other euro area Member States is necessary
to fulfil the ECB's statistical requirements in the area of
portfolio investment (and related income). The data are
used to compile the euro area aggregated transactions
and positions in portfolio investment
liabilities and
debits in portfolio investment income. This is in accor-
dance with national requirements or established prac-
tices.

and

and
financial

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

The quality assessment framework for the euro area
balance of payments and international investment posi-
tion statistics and the international reserves template
should be defined, as far as possible, in line with the
‘Data Quality Assessment Framework’ developed by the
International Monetary Fund (IMF). The NCBs, in coop-
eration with competent authorities other than NCBs,
where appropriate, should assess the quality of the data
which they contribute. Criteria for assessing the data
quality include timeliness, accuracy, plausibility, internal
and external consistency and reliability (for the time
being limited to ‘stability’, that is, the necessary revisions
have a limited impact).

(10)

(11)

The transmission from the NCBs to the ECB of confiden-
tial statistical information takes place to the extent and
in the detail necessary for the exercise of the tasks of the
ESCB. Where competent authorities other than NCBs are
the sources of statistical information marked as confi-
dential, the use of such information by the ECB should
be limited to the exercise of ESCB-related statistical
tasks.

It is necessary to set up a procedure to carry out tech-
nical amendments to the annexes to this Guideline in an
such amendments
effective manner, provided that
neither change the underlying conceptual
framework
nor affect the reporting burden of reporting agents in
Member States. Account will be taken of the views of
the Statistics Committee of the ESCB when following
this procedure. NCBs may propose such technical
amendments to the annexes to this Guideline through
the Statistics Committee.

(12)

In accordance with Article 12.1 and Article 14.3 of the
Statute, ECB guidelines form an integral part of Commu-
nity law,

HAS ADOPTED THIS GUIDELINE:

Article 1

Definitions

For the purposes of this Guideline:

— ‘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 III, 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 resi-
dents.

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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
portfolio investment account within the
international
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,

— ‘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 hold-
ings,

— ‘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
contingent short-term net drains on the Eurosystem, 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.

Article 2

Statistical obligations of the NCBs

1.
The NCBs shall make available to the ECB data on the
cross-border transactions, stocks of reserve assets, other foreign
currency assets, reserve-related liabilities and cross-border posi-
tions necessary to enable the ECB to compile the aggregated
balance of payments and international
investment position
statistics and the international reserves template of the euro
area.

The data shall be accompanied by readily available infor-
2.
mation 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.

3.
The required data shall be made available to the ECB as
laid down in Annexes I, II and III, 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 I, Sections 1.1, 1.2 and 3 and Annex II, Tables 1, 2 and
4 shall be made available as from 1 July 2005; if the CSDB
system is not operational by 31 March 2004, the deadline shall
be 15 months from the date on which the Statistics Committee
informs the Governing Council that it is operational.

4.
The required data on the balance of payments shall be
made available on a monthly and quarterly basis. The required
data on the international reserves template shall be made avail-
able as at the end of the month to which the data relate. The
required data on the international investment position shall be
made available as at the end of the year to which the data
relate.

5.
As from 1 January 2005 portfolio investment collection
systems shall conform to a model that is considered at least
‘acceptable’ according to the table set out in Annex VI. If NCBs
are unable to meet this deadline they shall establish, by the end
of June 2003, in liaison with the ECB, a timetable to comply
with the common standard.

Article 3

Timeliness

1.
Data for the monthly balance of payments of the euro
area shall be 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.

The quarterly detailed breakdown for the balance of
2.
payments of the euro area shall be made available to the ECB
within three months of the end of the quarter to which the
data relate.

The data on the international reserves template shall be
3.
made available to the ECB within three weeks of the end of the
month to which the data relate.

The data on the international investment position shall be
4.
made available to the ECB within nine months of the end of
the year to which the data relate.

Revisions concerning the balance of payments and the
5.
investment position of the euro area shall be
international
made available to the ECB according to the time schedule laid
down in Annex IV.

The national collection of these data shall be organised

6.
with a view to meeting these deadlines.

Article 4

Cooperation with competent authorities other than NCBs

1. Where the sources for part or all of the data described in
Article 2 are competent authorities other than NCBs, NCBs
shall establish the appropriate modalities of cooperation with
these authorities to ensure a permanent structure for transmis-
sion of data which fulfils the ECB's standards, in particular on
data quality, and any other of its requirements as set out in this
Guideline, unless the same result is already achieved by national
legislation.

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For the financial account of the balance of payments, the
2.
related income, and the international investment position, the
NCBs shall be responsible for ensuring that the concepts, meth-
odology and data collection, compilation, analysis and trans-
mission in these areas are maintained and developed.

3. Where competent authorities other than NCBs are the
source of statistical information marked as confidential, such
information shall be used by the ECB exclusively for the exer-
cise 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.

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.

Article 7

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 Guideline, provided that
such amendments neither change the underlying conceptual
framework nor affect the reporting burden of reporting agents
in Member States.

Article 5

Transmission standard

The required statistical information shall be made available to
the ECB in a form which meets the requirements laid down in
Annex IV.

Article 6

Quality of the statistical information

1. Without prejudice to the ECB's monitoring tasks as laid
down in Annex V, the NCBs shall, in cooperation with compe-
tent authorities other than NCBs as mentioned in Article 4
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,
investment position
statistics and international reserves. The assessment shall be
carried out in a timely manner. The Executive Board of the
ECB shall report yearly to the Governing Council on the quality
of the data.

international

2.
The ECB's monitoring of the quality of statistical informa-
tion may include scrutiny of revisions made to these data: first,
to include the latest assessment of the statistical information,

Article 8

Repeal

Guideline ECB/2000/4 is hereby repealed.

Article 9

Final provisions

This Guideline is addressed to the NCBs of participating

1.
Member States.

2.

This Guideline shall enter into force on 1 June 2003.

This Guideline shall be published in the Official Journal of

3.
the European Union.

Done at Frankfurt am Main, 2 May 2003.

On behalf of the Governing Council of the ECB

Willem F. DUISENBERG

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ANNEX I

STATISTICAL REQUIREMENTS OF THE EUROPEAN CENTRAL BANK

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 bj e c ti 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 II, Table 1).

R eq u i r e me nts

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 (see Article 2(3) of this Guideline), 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 esti-
mates 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 consolida-
tion 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 break-
down:

— 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 this Guideline,
data on net transactions in portfolio investment securities issued by euro area residents broken down by the institu-
tional 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 transac-
tions in securities issued and purchased by euro area residents.

1.2. Quarterly balance of payments statistics

O bj e c ti 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 eq u i r e me nts

Quarterly balance of payments statistics conform as far as possible to international standards (see Article 2(3) of
this Guideline). The required breakdown of quarterly balance of payments statistics is presented in Annex II, Table
2. Harmonised concepts and definitions used in the capital and financial accounts are set out in Annex III.

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 Interna-
tional 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 partici-
pating Member States and all other external transactions. As for the monthly data, a distinction between transac-
tions in securities issued by euro area residents and securities issued by non-euro area residents is required for quar-
terly 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 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.

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 institu-
tional sectors follows the standard components of the IMF comprising (i) monetary authorities; (ii) MFIs (excluding
central banks); (iii) general government; and (iv) other sectors.

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 bj e c ti 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 interna-
tional investment position statistics.

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R e q u i r e me 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 II, Table 3,
Section I.A.

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 II, 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 repre-
sent 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 II, Table 3, Sections II to IV.

3.

International investment position statistics

O bj e c ti 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 me 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 (see Article 2(3) of
this Guideline). The ECB compiles the international investment position for the euro area as a whole. The break-
down of the international investment position for the euro area is presented in Annex II, Table 4.

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

The international investment position shows financial stocks at 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. Thirdly, in the event that
stocks are denominated in currencies other than the unit of account used for the 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 posi-
tions. 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. Statis-
tics 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.

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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 require-
ments 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 this Guideline.

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

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ANNEX II

REQUIRED BREAKDOWNS

Table 1

Monthly items for the balance of payments of the euro area

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

Portfolio investment

Equity securities

Credit

extra

extra

extra

extra

extra

extra

extra

extra

Debit

extra

extra

extra

extra

extra

extra

extra

Net assets

Net liabilities

extra (1)/intra (1)

national (2)

extra (1)/intra (1)

national (2)

Net

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

(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)

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Net assets

Net liabilities

Net

Debt securities

— Bonds and notes

(i) Monetary authorities

(ii) MFIs (excluding central banks)

(iii) Non-MFIs

— Money market instruments

(i) Monetary authorities

(ii) MFIs (excluding central banks)

(iii) Non-MFIs

Financial derivatives

Other investment

Monetary authorities

General government

MFIs (excluding central banks)

— Long-term

— Short-term

Other sectors

Reserve assets

extra (1)/intra (1)

extra (1)/intra (1)

extra (1)/intra (3)

extra (1)/intra (3)

extra (1)/intra (3)

extra (1)/intra (1)

extra (1)/intra (3)

extra (1)/intra (3)

extra (1)/intra (3)

extra

extra

extra

extra

extra

extra

extra

extra

national (2)

national (2)

—

national (2)

national (2)

national (2)

—

national (2)

national (2)

extra

extra

extra

extra

extra

extra

extra

national

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

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

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— Other capital

(i) MFIs (excluding central banks)

(ii) Non-MFIs

Portfolio investment

Equity securities

(i) Monetary authorities

(ii) General government

Net

extra

extra

extra

Net assets

Net liabilities

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

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

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

national

national

national

national

national

extra

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

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Net assets

Net liabilities

Net

Reserve assets

Monetary gold

Special drawing rights

Reserve position in the International Monetary
Fund (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’

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

Table 3

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

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

(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

Equity securities

(i) Monetary authorities

(ii) General government

Assets

Liabilities

Net

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

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

III. Financial derivatives

(i) Monetary authorities

(ii) General government

(iii) MFIs (excluding central banks)

(iv) Other sectors

IV. Other investment

(i) Monetary authorities

— loans/currency and deposits

— other assets/liabilities

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

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Assets

Liabilities

Net

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

extra

(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’

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 port-

folio 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 III

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 investment position of 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.

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
asset (credits) and, symmetrically, income derived from a non-euro area resident's ownership of a euro area finan-
cial 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)

The capital account covers capital transfers and the acquisition/disposal of non-produced non-financial assets.
Current transfers are to be recorded in the current account. Capital transfers consist of (i) 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 prac-
tice, 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.

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 stan-
dards (IMF), the ‘10 % ownership criterion’ is applied in order to infer the existence of a direct investment relation-
ship, i.e. a lasting interest in the case of the euro area balance of payments/international investment 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
flows/holdings between/vis-à-vis the related entities are recorded as direct investment transactions/positions (1).

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 subsidi-
aries 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 certi-
ficates 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.

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.

(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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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 ‘accep-
table’) 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 treat-
ment 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)

indicator or
Financial derivatives are financial
commodity, and through which specific financial risks can be traded in financial markets in their own right. Trans-
actions 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
investment’. The treatment of variation margin payments depends on the form of the variation margin: options-
style variation margins are regarded, in principle, as changes in deposits and should be recorded, if identifiable,
under ‘other investment’. Futures-style variation margin payments are regarded, in principle, as transactions in deri-
vatives and should be recorded under ‘financial derivatives’.

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.

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. It also encom-
passes the offsetting entries for accrued income on instruments classified under other investment.

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.

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

inter alia,

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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
financial corporations, is intended to better reflect the economic rationale behind these financial instruments.

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’, ‘time of settlement’ and ‘time of payment’ all conform to the IMF stan-
dards.

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 compa-
tible but not identical with the breakdown of 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.

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 resi-
dents 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.

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 transac-
tions. Additional details of Eurosystem transactions in gold, foreign exchange, holdings of SDRs and reserve posi-
tion in the IMF are available quarterly following BPM5 standard components. A separate category for financial deri-
vatives 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.

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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 supple-
mented 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 (RoW):

— 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).

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)

Ste p 1:

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

Implemented since 1999 for international investment positions.

Ste 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 invest-
ment position).

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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.

Ste p 3:

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the addi-
tion of a geographical breakdown (see Table 6) within non-euro area transactions/positions. Step 3 is only neces-
sary 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 investment position: end-September 2004 — data referring to end-
2002 and end-2003.

2.2. Portfolio investment account

Ste p 1:

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

Implemented since 1999 for international investment position.

Ste 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 liabil-
ities.

Data requirements at the NCB level: transactions/positions in portfolio investment assets broken down into transac-
tions/positions in euro area securities issued by euro area residents and other securities. To achieve this it is neces-
sary 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 resi-
dents, taking advantage of the fact that the data requirements established by the ECB are fully consistent with parti-
cipation 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.

Ste p 3:

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the addi-
tion 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.

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2.3. Portfolio investment income account

Ste p 1:

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

Ste p 2:

Compilation method at the euro area level: addition of income credit transactions derived from portfolio invest-
ment assets issued by non-residents. Consolidation of income debit transactions derived from total national net
liabilities and credit transactions derived from securities issued by euro area residents.

Data requirements at the NCB level: credit transactions in portfolio investment income broken down into transac-
tions derived from securities issued by euro area residents and from securities issued by residents of other coun-
tries. 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.

Ste p 3:

Compilation method at the euro area level and data requirements at the NCB level: similar to Step 2 with the addi-
tion 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 refer-
ring to first quarter of 2003.

2.4. Financial derivatives account

Transactions

Ste 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

Ste p 1:

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

Implemented since 1999.

Ste p 2:

Compilation method at the euro area level: separate addition of net positions in financial derivatives with non-resi-
dents 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.

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Ste 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 of America

— 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)

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

(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 break-

down 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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(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 insti-
tutions, 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’.

List of offshore 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

Eurostat + OECD
Offshore financial centres

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

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ISO codes

PA

PH

SG

TC

VC

VG

VI

VU

WS

Eurostat + OECD
Offshore financial centres

Panama

Philippines

Singapore

Turks and Caicos Islands

Saint Vincent and the Grenadines

Virgin Islands, British

Virgin Islands, US

Vanuatu

Samoa

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. Ma j or U ni te d N a ti on s or g a n i sa ti on s

WTO (World Trade Organisation)

IBRD (International Bank for Reconstruction and Development)

IDA (International Development Association)

(1) Based on the European Commission (Eurostat) BoP vade-mecum.

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2.2.2. O th er U ni te d N a ti on s or g a n i sa ti on 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)

2.2.3. O th er ma j or i nte r na ti ona l i n sti tu ti on s, or g a n s a nd or g a ni sms (e xc lu di ng the E CB )

OECD (Organisation for Economic Cooperation 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 Cooperation)

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 th er i nte r na ti ona l or g a ni sa ti ons

NATO (North Atlantic Treaty Organisation)

Council of Europe

ICRC (International Committee of the Red Cross)

ESA (European Space Agency)

EPO (European Patent Office)

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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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ANNEX IV

TRANSMISSION OF DATA TO THE EUROPEAN CENTRAL BANK

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 consid-
ered as incomplete reporting. Should an observation be missing, the omission is recorded using the corresponding
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
international investment position data for the corresponding year; and (iii) the revised international investment posi-
tion 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 V

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 publica-
tion European Union balance of payments/international investment position statistical methods (the BoP Book), and using 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 statis-
tics for all Member States. There are detailed descriptions of data compilation methods and of the concepts and defini-
tions applied, as well as information on departures from the agreed definitions for the balance of payments and interna-
tional 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 VI

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]

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

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.]

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

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 [agg.] + quarterly flows [agg.] + estimated monthly flows [agg.]

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

Ideal

Good

Acceptable

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

(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.