Document ID: chunk:federal_register_of_legislation:F2017L01028:body:0:p7
Version: federal_register_of_legislation:F2017L01028
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at fair values (i.e. current credit exposure calculated as the sum of all positive fair values of derivative contracts outstanding after taking account of legally enforceable bilateral netting agreements) as this ensures consistency not only with the BIS OTC derivatives statistics but also with the valuation principles for all other on- and off-balance sheet items in the BIS international financial statistics. Negative fair values of derivative contracts are considered to represent financial liabilities and are therefore by definition excluded from the reporting of financial claims.

Contingent liabilities resulting from guarantees and credit commitments should be valued at face values or the maximum possible exposure.

Standard Business Reporting (SBR)

The accounting type (i.e. credit or debit) is stated for all monetary items and represents the natural accounting type of the item collected.

Background to the international exposures forms

There are two main sets of international banking data: the locational and consolidated banking statistics.

The locational statistics (collected on ARF 731.1) collect data on the domestic book international financial claims (assets) and liabilities of resident banks.

The consolidated statistics (collected on ARF 731.3A, ARF 731.3B and ARF 731.4) collect data on the international on-balance sheet (and selected off-balance sheet) financial claims (i.e. contractual lending) of banks vis-à-vis the rest of the world and provides a measure of the risk exposure of lenders' national banking systems. The data mainly cover contractual lending by the head office and all its branches and subsidiaries on a global consolidated basis, net of inter-office accounts. These statistics also provide information on the maturity (i.e. liquidity) and sector risk distribution of reporting entities' contractual lending.

As reporting entities' country risk exposures can differ substantially from that of contractual lending, information on claims on an ultimate risk basis is also collected. Claims on an ultimate risk factor in risk transfers such as guarantees and collateral.

The key difference between the two sets of BIS banking data is based upon the concept of residency. Locational statistics show the claims and liabilities of banks located in Australia vis-à-vis entities located in other countries, including inter-office positions, and domestic entities.

The consolidated statistics show the total claims of a reporting entity group's global offices, including the claims of their domestic and foreign affiliates. Claims between offices of the same entity group are netted out.

The differences between locational and consolidated data are highlighted in an example in Figure 1. ABC Bank (headquartered in Sydney) has lent $10 million to a non-financial corporation located in France routed via its branch office in London.

Figure 1: Flow of funds and BIS locational and consolidated statistics

 $10m $10m

The implications of this transaction for the BIS data are as follows:

Locational statistics:
Australian resident bank