## Financial and Payments Systems Task Team (FITT) Second Meeting — November 24, 2020

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**Canonical URL:** [Financial and Payments Systems Task Team (FITT) Second Meeting — November 24, 2020](https://www.imf.org/-/media/files/data/statistics/bpm6/fitt/fitt-second-meeting-presentation-november-24-2020.pdf)

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### Introduction and New FITT Members
- New FITT Members (GFS Community):
  - Philippe De Rougemont (Eurostat)
  - Nabila Akhazzan (IMF/GO)
- Additional contributors to specific GNs (TBD):
  - Martim Assuncao (Eurostat)
  - Floris Jansen (Eurostat)

### Outcomes of the October 2020 BOPCOM and AEG Meetings
- Two guidance notes (GNs) presented:
  - F.5: Treatment of Credit Default Swaps
  - F.8: Valuation of Debt Securities at Both Market and Nominal Values
- The Committee actions and decisions:
  - Credit Default Swaps (CDS)
    - Majority support to maintain the current treatment of CDS as option type, following strong support during the public consultation.
    - For supplementary breakdown by risk categories, referral to the F.4 team (classification of financial derivatives by type) for comprehensive assessment; Committee may revisit decisions depending on final outcome.
    - Actions:
      - Co-authors to prepare a final version of the GN for posting on the BOPCOM website and to be part of the proposed annotated outline of BPM7.
      - F.4 team to assess the proposed supplementary breakdown by risk categories comprehensively.
  - Valuation of Debt Securities at Both Market and Nominal Values
    - Committee supported proposals to:
      i. strengthen the guidance in BPM6 and 2008 SNA for presenting stocks of debt securities at nominal value for liabilities;
      ii. report supplementary items on the nominal value of the total amount of assets in debt securities and intercompany lending (in economies where it is relevant);
      iii. clarify the definition of nominal value consistently in all the manuals.
    - Actions:
      - FITT to prepare a final version of the GN stating final recommendations, clarifying the definition of nominal value, and highlighting the need for its consistency across macroeconomic statistics manuals.
      - Final GN to be posted on the BOPCOM website and to be part of the proposed annotated outline of BPM7.

### Updates in the Research Agenda — New Topics and Proposed Actions
- Topic 1: The treatment of crypto assets in macroeconomic statistics
  - Issue: Proposal from a recent meeting among OECD, Eurostat, BEA, and IMF to add crypto assets separately from FINTECH. AEG agrees.
  - Proposed action: Add to the list of high-priority research topics and request for volunteers to work on the topic.
- Topic 2: Treatment of Master Risk Participation Agreements
  - Issue: Indonesia — funded risk participation (participant deposits an amount equal to the loan with the grantor for payments equal to interest, principal, and commissions under the loan agreement from the grantor) and unfunded risk participation (no deposit but participant agrees to reimburse the grantor in the event of a payment default by the borrower for a fee from the grantor).
  - Proposed action: Add to the list of medium-priority research topics and request for volunteers to join Indonesia as lead author and contributors.
- Topic 3: Debt concessionality
  - Issue: From BPM6 Research Agenda (paragraph 1.43) and initial list of BOPCOM research topics; will also cover Low interest and interest free loans proposed by the GFS community.
  - Proposed action: Add to the list of medium-priority research topics and request for volunteers to work on the topic.
- Topic 4: Subscription rights
  - Issue: ECB: Need to clarify whether subscription rights should be classified as financial derivative or equity.
  - Proposed action: Add to list of medium-priority research topics and request for volunteers to work on the topic.
- Topic 5: Factoring transactions
  - Issue: ECB: Differences in statistical recording between factoring with recourse or without recourse (note that F.14 is rather on income--related to factoring--and it seems better placed in CATT).
  - Proposed action: Add to the list of research topics or cover the issue within F.14 (Treatment of factoring transactions).

### Takeaways From Drafting Teams — Challenges and Lessons
- Identified challenges in drafting and finalizing GNs:
  - Very tight schedule: Each step (e.g., drafting, consultation within the FITT, incorporation of comments) took more time than originally scheduled.
  - Conflicting views in the authoring team and FITT members: Need to find conclusions acceptable to all.
  - Joint work between National Accounts and External Sector Statistics communities: May not be familiar with the perspective of the other community.
- Suggested approaches to address challenges:
  - Very tight schedule: Plan ahead and start drafting as early as possible.
  - Conflicting views: Consult within the authoring team at an early stage to explore a happy medium and think outside the box.
  - Joint work across communities: Collaborate with team members from the early stage for their input.

### Next Set of Guidance Notes (GNs)
- F.3: Reverse Transactions (RTs)
  - Scope: Revisit current concepts and treatment of RTs to ensure consistent recording of different arrangements under RTs and provide further methodological guidance and clarifications on recording positions and transactions associated with RTs.
  - Status: GN has already been consulted with FITT members and being sent to the Balance of Payments Task Team and the Advisory Expert Group of National Accounts.
- F.10: Treatment of Cash Collateral
  - Scope: Examine treatment of cash collateral agreements in general terms, including repayable margins in financial derivatives.
  - Status: GN has already been shared in the authoring team and being sent to FITT members for consultation.

### Schedule of the Preparation of FITT GNs (Key Deadlines)
- February 2021 Meeting (F.3 Reverse transactions; F.10 Treatment of cash collateral)
  - Draft GN to be submitted to AEG/BPTT for review: No later than November 30, 2020
  - GN to be posted for public consultation: No later than December 18, 2020
  - GN to be sent to the Committee: No later than February 5, 2021
- June 2021 Meeting (F.2; F.4; F.9; F.13; F.14)
  - Draft GN to be ready for FITT review: No later than February 26, 2021
  - Draft GN to be submitted to AEG/BPTT for review: No later than March 15, 2021
  - GN to be posted for public consultation: No later than April 16, 2021
  - GN to be sent to the Committee/AEG: No later than June 4, 2021

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/fitt/fitt-second-meeting-presentation-november-24-2020.pdf_