|The conclusions of this paper sound quite reasonable. I think the point that the SNA framework provides a systematic basis for placing FSIs within a macroeconomic context useful for analysis and policy purposes is particularly well taken. Based on my experience with the systemic crisis in Indonesia, I would think that this critical point might deserve to be further elaborated on. In addition to providing comprehensive standards, as the conclusion mentions, the SNA also brings:
1. Consistency among economic sectors. This is best illustrated by the quadruple entry requirement, vs. double entry in supervisory accounting. Thus, if banks write down their loans for an amount equal to 30 or 40 percent of GDP, the SNA will be able to identify and qualify the impact on the other sectors (in particular the corporate sector), providing critical information for policy purposes that the supervisory accounting overlooks in its entirety. This distinct superiority of the SNA during systemic crises should be safeguarded in any revision of the 1993 framework.
2. As a complement to the previous point, the SNA also provides a more useful characterization of the "bottom line", of the economic result. Supervisory accounting qualifies this as profit, or more often during crises as "losses" (big, big, losses.....), followed by a full stop, i.e. the end of the story: just send the bill to the taxpayer, please... The SNA brings to light that this "bottom line" is often just a transfer between sectors. It indicates that value has not evaporated but has been redistributed. The policy implications are of course considerable.
In a nutshell, the SNA has something more, something unique to bring: it goes deeper, it goes beyond. This precious value added should not be lost, nor even diluted, as a result of convergence efforts that will in any case probably prove to a large extent futile or at least painfully slow....this is why I particularly like the conclusion of the conclusion that focuses on the fruitful differences rather than on a systematic quest for harmonization.
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