## _wp1257

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---

### I. Purpose, context, and rationale
- Focus: Recommendation 15 from the FSB/IMF response to the 2008 crisis — extend national accounts to compile financial and nonfinancial stocks and flows by economic sector (sectoral balance sheet approach and "flow of funds" statistics).
- Rationale and benefits:
  - Financial crises involve abrupt revaluations or other changes in capital positions; balance sheets and accumulation accounts (levels and changes) are critical.
  - Relevant SNA flows: transactions, revaluations (holding gains and losses), and other changes in the volume of assets.
  - From-whom-to-whom statistics enable:
    - "Who is financing whom, in what amount, and with which type of financial instrument?"
    - Tracing allocation of income (who pays/receives income to/from whom).
    - Enhanced data quality and consistency via additional cross-checks.
  - The SNA provides an integrated framework but historically emphasizes "who does what" rather than counterparty linkages; implementing from-whom-to-whom expands analytical power (e.g., supports IMF’s Balance Sheet Approach (BSA)).

### II. SNA integrated accounts and accounting principles
- Structure and sequence:
  - Integrated accounts cover production, distribution and use of income, accumulation accounts, and balance sheets (nonfinancial assets; financial assets and liabilities; net worth).
  - Change in net worth = saving + net capital transfers receivable + holding gains less holding losses + other (net) changes in volume of assets or liabilities.
- Accounting conventions that enable consistency and counterparty tracing:
  - Residence approach records flows and positions of resident institutional units grouped into sectors/subsectors and with nonresidents.
  - Double-entry for an entity; transactions between two units imply quadruple entries across counterparties ensuring:
    - vertical consistency,
    - horizontal consistency,
    - counterpart consistency,
    - stock-flow consistency (time of recording uses accrual principle; valuation uses current market prices at transaction time and point-in-time positions).
- Flow classification:
  - Transactions (mutually agreed economic actions) vs other economic flows (revaluations and other changes in volume such as disaster losses or debt write-offs).
  - Balance sheets record stocks; positions change through transactions and other economic flows.
- Standard SNA financial instrument classification recommended but flexibility for further breakdowns (currency, remaining maturity) is necessary for financial stability analysis.

### III. From-whom-to-whom framework: conceptual support and limitations
- Conceptual support:
  - Chapter 27 (2008 SNA) and the Handbook on Securities Statistics provide for three-dimensional tables: asset type × creditor sector × debtor sector.
  - From-whom-to-whom presentation records transactions, revaluations, other changes in volume, and balance sheet positions cross-classified by debtor sector and creditor sector.
- Practical limitations and compilation burdens:
  - SNA does not emphasize counterparty detail because of reporting burdens (especially for negotiable securities and secondary-market trades).
  - Residence-based nonconsolidated presentation recommended for residents (intra-sectoral cells retained).
  - National coverage excludes financial assets issued and held exclusively by nonresidents from a national perspective; nonresident holdings vis-à-vis residents are shown in rest-of-world accounts.
- Data-quality and analytical gains:
  - Allows cross-checking debtor and creditor side information, ensuring consistency in values and timing.
  - Traces debtor/creditor relationships, improving understanding of interconnectedness and spillovers.

### IV. Country and dataset developments (compilation practice and empirical coverage)
- Country practice highlights:
  - Australia: disseminates financial transactions and positions with counterparty breakdown in an integrated framework.
  - Japan and U.S.: disseminate financial accounts and financial balance sheets with instrument and subsector detail enabling debtor/creditor identification in many cases.
  - Euro area: some detailed from-whom-to-whom data for loans and deposits; many European countries compile quarterly sector accounts with such detail (Austria, France, Germany, Italy, Portugal, Spain, U.K.).
  - Among G-20 emerging markets, only a couple provide partial from-whom-to-whom information.
- Main source datasets used for from-whom-to-whom and BSA:
  - Standardized Report Form (SRFs): as of 2011, 32 countries report data for monetary authorities, depository corporations (DCs) and other financial corporations (OFCs); reports covering only monetary authorities and DCs are received from 126 countries.
  - International Investment Position (IIP), Coordinated Portfolio Investment Survey (CPIS), Quarterly External Debt Statistics (QEDS), Joint External Debt Hub (JEDH).
  - BIS locational international banking statistics: quarterly gross balance sheet positions by country of residence of counterparties; consolidated banking statistics available from 30 reporting countries for global aggregates.
  - CPIS: annual since 2001; collects data from about 75 countries; collects by immediate counterpart economy; planned enhancements expected starting with data for 2013 (semi-annual collections; timeliness improvements; voluntary collection of issuer-sector and short/negative positions).
  - CDIS: first conducted in 2009; annual since 2010 (data for end-2009); participation voluntary with 92 economies participating; collects inward and mostly outward direct investment position data by immediate counterpart economy.
- Data gaps and frequency limitations:
  - Monthly SRF-based data: positions between general government and other resident sectors are incomplete; creditor/debtor positions between general government, nonfinancial corporations, and other resident sectors often unavailable monthly.
  - Positions involving nonresidents are frequently available only from lower-frequency sources (IIP, QEDS, CPIS, JEDH).
  - Example numeric illustration in Annex I: Net external assets (external counterpart) = 26 (=150-124).

### V. The Balance Sheet Approach (BSA) and analytical uses
- BSA focus and matrix structure:
  - Analytical framework focusing on stocks of assets and liabilities in sectoral balance sheets to identify how balance sheet weaknesses cause and propagate crises.
  - Uses SNA balance sheets with detailed flow of funds; liabilities in BSA matrices are consolidated by sector leaving diagonal intra-sectoral holdings empty (in consolidated view).
- Four balance sheet mismatches identified:
  - (a) currency mismatches;
  - (b) maturity mismatches;
  - (c) capital structure mismatches (excessive reliance on debt);
  - (d) solvency risk (assets insufficient vs liabilities).
- Typical BSA compilation practice:
  - Monthly BSA matrices for selected countries using SRF reports with breakdowns by currency (national and foreign) and original maturity.
  - Standard sectors: central bank, other deposit-taking corporations, OFCs, general government (central, state and local), nonfinancial corporations (public and private), other resident sectors (households and nonprofit institutions serving households), and nonresidents.
  - SRF-based data provide satisfactory creditor/debtor positions among financial corporations subsectors, other sectors, and rest of the world.
- Policy uses:
  - Sectoral from-whom-to-whom accounts support multilateral surveillance, financial stability monitoring, monetary transmission analysis, government debt monitoring, and securities financing/portfolio vulnerability assessment.

### VI. Implementation strategy and sequencing (operational recommendations)
- International coordination and consensus:
  - IMF-OECD Conference (February 28–March 2, 2011) agreed on a basic outline of a reporting template and timeframes:
    - Four building blocks: (i) minimum sector/subsector breakdowns; (ii) transactions breakdowns of current and capital accounts; (iii) financial instrument classification (including debt by remaining maturity and currency); (iv) classification of nonfinancial assets.
    - Agreement on quarterly frequency with timeliness of one quarter.
    - Coordination among ECB, Eurostat, OECD, IMF, BIS; integrate with 2008 SNA implementation plans.
- Sequenced implementation steps (recommended):
  a. Traditional financial transactions and positions by main sectors;  
  b. Further details for financial corporations by subsectors and general government; include other economic flows where feasible;  
  c. From-whom-to-whom financial positions and flows for subsectors of financial corporations and possibly general government;  
  d. From-whom-to-whom financial positions and flows for specific instruments (loans, deposits, some important negotiable instruments);  
  e. Fully integrated financial positions and flows on a from-whom-to-whom basis by sectors (subsectors) — progressing from aggregated subsector and instrument detail toward more disaggregated detail.
- Institutional, resource and confidentiality considerations:
  - Requires dedicated staff, data-collection resources, processing systems, and formal inter-agency coordination; technical assistance and training prioritized, potentially via pilot countries and regional training.
  - Balance response burden, confidentiality constraints, and costs; compromises on aggregation levels and data-source choices may be necessary.
  - Confidentiality may limit collection of very granular counterparty detail; initial simplified creditor-by-residency tables recommended, later expanding to full from-whom-to-whom tables.
- Practical data-integration suggestions:
  - Initial integration of monetary statistics, balance of payments, and government finance statistics to capture detailed nonnegotiable instruments (deposits, loans, trade credit, insurance and pension entitlements).
  - Use of securities micro-databases (example: ESCB CSDB) or holder-level reporting to derive security-by-security holdings by sector and residency where feasible.

### VII. Operational tables and templates for from-whom-to-whom compilation
- Table frameworks presented (exact labels preserved):
  - Table 2A — Financial Instruments Classified by Creditor Sector and Residency of Debtor:
    - Creditor sectors: Nonfinancial corporations; Financial corporations; General government; Households and nonprofit institutions serving households; All creditors.
    - Instrument categories: Monetary gold and SDRs; Currency and deposits; Debt securities; Loans; Equity and investment fund shares or units; Insurance, pension and standardized guarantee schemes; Financial derivatives and employee stock options; Other accounts receivable/payable.
    - Residency breakdown: Residents; Nonresidents; All debtors.
    - Note: A similar table may be compiled showing instruments classified by debtor sector and residency of creditor.
  - Table 2B — Financial Instruments Acquisitions in a From-Whom-to-Whom Framework:
    - Creditor resident sectors/subsectors: Nonfinancial corporations; Financial corporations and subsectors; General government; Households and nonprofit institutions serving households; Nonresidents; All creditors.
    - Debtor instrument categories: Monetary gold and SDRs; Currency and deposits; Debt securities; Loans; Equity and investment fund shares or units; Insurance, pension and standardized guarantee schemes; Financial derivatives and employee stock options; Other accounts receivable/payable.
    - Preserves residency and counterparty detail across creditor and debtor sectors and subsectors; nonconsolidated presentation recommended for resident intra-sectoral cells.
- Securities compilation example (ESCB CSDB):
  - CSDB attributes include ISIN, issuer residence, sector/subsector of issuer, issue/redemption dates, type, currency, outstanding amount/market capitalisation, coupon schedule.
  - Production process: inputs from central banks, agencies, commercial providers; data quality management; linking CSDB to holdings statistics via holder/custodian ISIN-level information to derive resident and nonresident sector holdings.
  - Reporting agents: custodians/central securities depositories and direct reporters; custodial reporting often used to derive residency of issuer and holder breakdowns.
  - Implementation cost and time: establishing integrated security-by-security holdings with frequent updates is demanding and cost intensive; ESCB expected multi-year roll-out for regular production.

### VIII. Analytical priorities and concluding implications
- From-whom-to-whom sectoral accounts are central to closing data gaps exposed by the 2008 crisis and for supporting tools like the BSA.
- Priority breakdowns to support financial stability analysis include:
  - subsectors of financial corporations,
  - currency denomination of assets and liabilities,
  - original and residual maturity breakdowns,
  - security-by-security holdings where feasible.
- Multilateral surveillance, financial stability monitoring, monetary policy analysis, and government debt transparency benefit from quarterly, timely, and harmonized from-whom-to-whom sectoral accounts.
- Implementation is feasible via a sequenced approach that balances analytical needs against data collection burden, confidentiality, and resource constraints.

*Source: IMF working paper section "1. Flows and Positions as Presented in the SNA" and related excerpts from _wp1257.*

### 1.  Flows and Positions as Presented in the SNA ......................................................................10

### 1.  Flows and Positions as Presented in the SNA

### I. Introduction: purpose and context
- In the wake of the 2008 financial and economic crisis, the G-20 economies asked the Financial Stability Board (FSB) and the International Monetary Fund (IMF) to identify data gaps and make recommendations to close them; the FSB and IMF produced 20 recommendations.
- This paper focuses on Recommendation 15: that G-20 member economies extend their national accounts by compiling financial and nonfinancial stocks and flows by economic sector, i.e., implementing a sectoral balance sheet approach and "flow of funds" statistics.
- Rationale for Recommendation 15:
  - Financial and economic crises involve abrupt revaluations or other changes in the capital positions of key sectors; therefore data on balance sheets and accumulation accounts (levels and changes) are critical.
  - Relevant flows in the System of National Accounts (SNA) comprise three principal types: changes in position arising from transactions, arising from revaluations, and arising from other changes in the volume of assets.
  - The SNA already envisages sectoral balance sheets and accumulation accounts, but implementation across G-20 members has been uneven.
- The 2008 crisis highlighted the need to understand financial interconnectedness among sectors and with the rest of the world; this requires from-whom-to-whom financial statistics that break down positions and flows by counterparty sector.
- The SNA provides an integrated framework but its standard presentation historically emphasizes "who does what" rather than "who does what with whom", which may explain limited availability of from-whom-to-whom statistics.
- Benefits of compiling sectoral accounts with from-whom-to-whom linkages:
  - Allows answering "Who is financing whom, in what amount, and with which type of financial instrument?"
  - Traces allocation of income—who pays/receives income (e.g., interest) to/from whom.
  - Enhances data quality and consistency through additional cross-checking and balancing opportunities.
- The SNA’s flexibility supports compliance with other analytical tools (example: the IMF’s Balance Sheet Approach (BSA), which breaks down counterparty positions by maturity and currency).
- Structure of the paper:
  - Section II: how the SNA can provide an integrated from-whom-to-whom framework and link domains of macroeconomic accounts.
  - Section III: developments in accounting on a from-whom-to-whom basis.
  - Section IV: preliminary thoughts on implementing the three-dimensional approach for compiling financial positions and flows.
  - Section V: conclusions.

*Source: IMF working paper section "1.  Flows and Positions as Presented in the SNA".*

### II. The SNA integrated accounts — depicting the economy and linkages
- Purpose: provide a comprehensive picture covering production, income distribution and use, and accumulation; show interactions among economic agents across real and financial spheres.
- Schematic economic cycle described:
  - Production generates income distributed between capital and labor.
  - Current transfers redistribute income.
  - Income used for consumption or saving.
  - Savings plus net capital transfers finance investment; if insufficient, deficits are filled by acquiring financial liabilities and/or disposing financial assets (net borrowing). If surplus, reflected in acquisitions of additional financial assets and/or liquidation of liabilities (net lending).
- Debtor/creditor relationships:
  - Entities with surplus funds acquire financial assets or redeem liabilities.
  - Entities with financing deficits incur liabilities or dispose of assets.
  - Debtor/creditor relationships created in financial markets have grown substantially and become more complex recently.
- Integrated statistical framework is required to capture relationships between real and financial flows and positions to avoid partial or erroneous analysis.
- The SNA captures integrated and consistent information on economic actions of all resident entities, their interactions with nonresidents, and records both flows and stocks (balance sheets).

### III. Residence approach, scope, and limitations
- The SNA follows the residence approach to record flows and positions of institutional units grouped into sectors and subsectors, resident in an economy, between them and with nonresidents.
- Limitation: may not provide proper risk-based measures for macroprudential analysis and for financial stability when cross-border operations through branches and subsidiaries controlled by home country entities grow in significance.
- The 2008 crisis identified the need for statistics on a worldwide-group-consolidated basis to show cross-border financial activities of corporate groups including intra-group flows and positions (related to Recommendations 13 and 14).

### IV. Institutional units, sectors, and subsectors
- Institutional units: economic units that can engage in transactions and can own assets and incur liabilities on their own behalf.
- SNA distinguishes five main institutional sectors:
  - nonfinancial corporations,
  - financial corporations,
  - general government,
  - households,
  - nonprofit institutions serving households.
- SNA provides a hierarchical classification for further dividing sectors into subsectors.
- Importance of subsector breakdowns:
  - Detailed creditor/debtor analysis requires breakdown by sector and subsector.
  - Further subsectoral breakdowns of financial corporations may be particularly important given their central role in intermediation, asset and liability size, and variety of instruments.

### V. Economic flows and stocks — classification and accounting treatment
- Economic flows:
  - Classified into transactions and other economic flows.
  - Transactions: economic actions between two entities by mutual agreement; some intra-unit actions are treated as transactions (e.g., increase in inventories of own produced output).
  - Other economic flows: not resulting from transactions; two types:
    - other changes in the volume of assets and liabilities (e.g., losses from natural disasters; write off of debt by creditor),
    - revaluations (holding gains and losses) due to changes in prices, including exchange rates.
- Balance sheet records stocks of nonfinancial assets and financial assets and liabilities; positions change through transactions and other economic flows.
- SNA recommends a standard classification of financial assets and liabilities for comparability but recognizes the need for further breakdowns for analytical needs, notably remaining maturity and currency breakdowns for analyzing maturity and currency mismatches.

### VI. Accounting principles supporting integration
- Accounting principles determine bookkeeping conventions, time of recording, and valuation.
- Double and quadruple entry accounting:
  - Entries for an entity follow double entry (debit and credit equal for that entity).
  - A transaction between two institutional units implies four entries in the accounts (two for each unit) — a quadruple entry system.
  - Quadruple entry ensures:
    - vertical consistency (debits and credits equal for each institutional unit),
    - horizontal consistency (debit entries of a transaction type for all entities equal to credit entries of that transaction type for counterpart entities),
    - consistency in counterparty relationship.
  - Quadruple entry provides the underlying basis for developing from-whom-to-whom data.
  - However, the SNA’s accounting structure aggregates transactions of the same kind by sector or economy and does not explicitly distinguish with whom transactions take place.
- Time of recording:
  - Quadruple entry implies entries related to a transaction and other economic flows should be recorded at the same time in accounts of all counterparties.
  - SNA uses the accrual principle: transactions are recorded when claims and obligations arise, are transferred, transformed, or extinguished.
- Valuation:
  - Entries for a transaction and financial positions should be recorded at the same value for counterparties.
  - Transactions are recorded at current market prices at the time of the transaction; positions are recorded at the point in time the balance sheet refers to.

### VII. Key implications and analytical priorities
- Implementing SNA sectoral accounts with from-whom-to-whom inter-sectoral relationships is an important step to close a major data gap revealed by the 2008 crisis.
- From-whom-to-whom data:
  - Allow tracing of counterparty relationships for assets, liabilities, and income flows.
  - Provide cross-checking and balancing that improve data quality and consistency.
- Additional analytical work and breakdowns (e.g., by subsector of financial corporations, currency, maturity) are necessary to support financial stability analysis and tools like the IMF’s Balance Sheet Approach (BSA).

*Source: IMF working paper section "1.  Flows and Positions as Presented in the SNA".*

### 27.      The SNA concepts and definitions are drawn from economic theories and are applied

### _wp1257 - 27.      The SNA concepts and definitions are drawn from economic theories and are applied

### Accounting structure and integrated accounts
- The SNA integrated accounts cover transactions, other flows and balance sheets and are built on three pillars: (i) institutional units and (sub) sectors, (ii) transactions and other flows, and (iii) assets and liabilities.
- The accounting structure organizes data on transactions, other economic flows, and stocks of assets and liabilities for sectors, subsectors, and the rest of the world.
- The sequence of accounts:
  - Current account: production of goods and services, generation, distribution, redistribution, and use of income (savings as final balancing item).
  - Accumulation accounts: include all changes in assets, liabilities, and net worth; corresponding positions are shown in the balance sheet.
  - Balance sheet comprises: (i) nonfinancial assets; (ii) financial assets and liabilities positions; and (iii) net worth as the balancing item between assets and liabilities.
- Change in net worth equals: saving, net capital transfers receivable, holding gains less holding losses, and other (net) changes in the volume of assets or liabilities.
- Table 1 summarizes how transactions, other flows, and positions are presented in the SNA (current account; accumulation account: capital account and financial account; revaluation account; other changes in the volume of assets account; balance sheet).

### Limitations of standard SNA presentation and need for counterparty detail
- Standard SNA flow accounts and balance sheets by (sub) sector do not, in general, provide detailed data by counterparty (sub) sector.
  - They show which sectors acquire assets and the types of financial assets transacted, but not which sectors incur the corresponding liabilities.
  - They identify net borrowing sectors and how they borrow, but not which sectors hold the corresponding financial instruments.
- For a full understanding of financial positions and flows it is important to know not only the types of liabilities used by a sector but also which sectors provide financing, and intra-sector transactions (especially for financial corporations and general government).

### From-whom-to-whom framework within the SNA
- Chapter 27 of the 2008 SNA provides inputs to an integrated from-whom-to-whom framework: detailed flow of funds accounts are based on three-dimensional tables recording transactions or financial asset and liability positions cross-classified by type of asset, creditor sector and debtor sector.
- The SNA conceptually supports presentation of financial positions and flows on a from-whom-to-whom basis but does not emphasize it due to reporting burdens on compilers (especially for securities and other negotiable instruments).
- The Handbook on Securities Statistics (BIS, IMF, ECB), particularly Part 2 on debt securities holdings, extends the SNA approach by reflecting from-whom-to-whom relationships (resident creditors and resident/nonresident debtors; nonresident creditors and resident debtors).
- From a statistical compilation viewpoint, from-whom-to-whom accounts:
  - Enhance quality and consistency by allowing cross-checking of debtor and creditor side information, ensuring consistency in values and timing for transactions, other flows, and positions.
  - Permit tracing debtor/creditor relationships and showing transactions, revaluations, other changes in volume, and balance sheet positions cross-classified by debtor sector and creditor sector.
- Table 2 illustrates a matrix presentation of from-whom-to-whom accounts for five resident sectors and the rest of the world for one financial instrument (nonconsolidated), with cells indicating creditor by residency and resident sector vs debtor by residency and resident sector.

### Nonconsolidated presentation and rest-of-world treatment
- For residents, nonconsolidated presentation is recommended: intra-sectoral positions, transactions, revaluations, and other changes in volume are not eliminated (those intra-sector cells are kept).
- Financial assets of nonresidents issued by nonresidents are not covered from a national economy perspective.
- Holdings of financial instruments by nonresidents vis-à-vis resident sectors are shown in the rest of the world balance sheet; acquisitions by nonresidents of instruments issued by residents are shown in the rest of the world financial account.
- Revaluations and other changes in volume for nonresident-related instruments are reflected in the rest of the world accumulation accounts.
- For economies with significant roles in global financial markets, information on counterparty economies and nonresident sectors is highly desirable.

### Developments in compilation and country experiences
- Data availability review in G-20 economies (IMF Statistics Department) findings:
  - Australia disseminates financial transactions and positions with counterparty breakdown within an integrated framework.
  - Japan and the U.S. disseminate financial accounts and financial balance sheets with instrument and subsector detail enabling debtor/creditor identification in many cases.
  - Euro area accounts show some detailed from-whom-to-whom data for loans and deposits; many European countries compile quarterly sector accounts with such detail (examples: Austria, France, Germany, Italy, Portugal, Spain, U.K.).
- The term “flow of funds” is used variably:
  - Sometimes means financial transactions only; other times includes both financial transactions and positions.
  - Examples: Indonesia, Mexico, South Africa refer to financial account by institutional sector as flow of funds; the U.S. uses “flow of funds” for both sectoral financial accounts and balance sheets; many European countries adhere to SNA terminology.
- Among G-20 emerging market economies, only a couple provide partial from-whom-to-whom flow of funds information (sectors and instruments).
- Partial counterparty information often exists for financial institutions but is not fully integrated into macroeconomic statistics such as the SNA; central bank statistics often capture creditor/debtor relationships (e.g., loans by financial sector and deposits) but may not follow SNA classifications, limiting integration.
- Broad implementation of from-whom-to-whom framework within integrated macroeconomic accounts has not yet materialized; G-20 advanced economies are positioned to lead further development and harmonization of terminology is necessary to avoid confusion.

### The Balance Sheet Approach (BSA)
- The BSA is an analytical framework focusing on stocks of assets and liabilities in sectoral balance sheets to ascertain how balance sheet weaknesses contribute to the origin and propagation of financial crisis.
- BSA emphasizes sectoral vulnerabilities and spillovers: weaknesses in one sector can affect creditors and the whole economy.
- The BSA gained momentum after the financial account crises of the 1990s and has been used by the IMF in surveillance work.
- In the BSA matrix (liabilities are consolidated by sector), the diagonal of intra-sectoral holdings remains empty.
- The BSA identifies four types of balance sheet mismatches that can trigger financial crisis:
  - (a) currency mismatches (liabilities in foreign currency and assets in domestic currency — capital losses and default risk from devaluation);
  - (b) maturity mismatches (assets long-term and liabilities short-term — rollover/default risk and sensitivity to short-term interest rates);
  - (c) capital structure mismatches (excessive reliance on debt instead of equity);
  - (d) solvency risk (assets insufficient to cover liabilities).
- The BSA uses SNA balance sheets but focuses on positions (stocks) of financial assets and liabilities and corresponds to the SNA “detailed” flow of funds.
- Main source data for BSA compilation include:
  - Standardized Report Form (SRFs) for monetary and financial statistics reported monthly to the IMF’s Statistics Department (STA).
  - As of 2011, 32 countries report data for monetary authorities, depository corporations (DCs) and other financial corporations (OFCs).
  - Reports covering only monetary authorities and DCs are received from 126 countries (including countries in the euro zone).
  - Other source data: international investment position (IIP), Coordinated Portfolio Investment Survey (CPIS), Quarterly External Debt Statistics (QEDS), and the Joint External Debt Hub (JEDH).
- Sector breakdown for BSA matrices: general government, financial sector and its subsectors, nonfinancial corporations, other resident sectors, and rest of the world.
- Currency denominations and original maturity breakdowns are important in classifying assets and liabilities in the BSA; classification of financial instruments follows the SNA but new recommended subcategory breakdowns may face data-availability constraints.

### Compilation practice for BSA
- BSA matrices are compiled monthly for selected countries primarily using monetary and financial statistics (SRF reports), with optional extensions using additional (typically lower-frequency) source data.
- Three SRF reports collect data respectively from: (a) central banks, (b) other deposit-taking corporations, and (c) OFCs.
- Data collected cover main SNA categories of financial instruments with breakdowns by currency (national and foreign) and original maturity.
- Standard sectors in SRF-based BSA: central bank, other deposit-taking corporations, OFCs, general government (central, state and local), nonfinancial corporations (public and private), other resident sectors (households and nonprofit institutions serving households), and nonresidents (rest of the world).
- These SRF-based data provide satisfactory creditor/debtor positions between financial corporations subsectors and other sectors and the rest of the world.

*Source: Excerpt from IMF document _wp1257 (section on SNA accounting structure, from-whom-to-whom framework, and Balance Sheet Approach).*

### 51.      In the monthly data, positions between general government and the other resident

### _wp1257 - 51.      In the monthly data, positions between general government and the other resident

### Monthly data gaps and coverage limitations
- Positions between general government and other resident sectors are incomplete in the monthly data because the creditor and debtor positions between general government, the nonfinancial corporations, and other resident sectors are not available on a monthly basis.
- Positions between general government and the rest of the world can be extracted from the IIP, the QEDS, and the CPIS, which are available at a lower frequency.
- Data on positions between the nonfinancial corporations and other sectors of the economy are also incomplete, as data on the positions held by this sector against general government and other resident sectors are usually not available.
- Stocks of liabilities of the nonfinancial sector held as financial assets by the rest of the world are available from the IIP, the QEDS, and the JEDH, while data on their holding of financial assets against the rest of the world are available from the IIP and the CPIS.

### Coordinated Portfolio Investment Survey (CPIS)
- Purpose: collect information on the stock of cross-border holdings of portfolio investment in securities (equity securities, and short- and long-term debt securities).
- Frequency and coverage:
  - Conducted annually since 2001.
  - Collects data from about 75 countries on their year-end portfolio investment positions with a breakdown by country of issuer.
  - Coverage corresponds to the coverage of the portfolio investment in the IIP.
- Concepts and presentation:
  - Concepts and principles are those contained in the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6).
  - Data are collected by immediate counterpart economy.
  - Permits presentation, at the level of each financial instrument, on a from-whom-to-whom basis showing holders of the assets vis-à-vis issuer countries.
- Content detail:
  - The CPIS contains encouraged items, including data on portfolio investment liabilities.
  - Contains splits including domestic sector of holder of securities and currency composition of securities held.
  - Identifies securities held by resident sectors with breakdown of resident holding sectors: monetary authorities, banks, other financial institutions (insurance corporations and pension funds, investment funds, and others), general government, and nonfinancial sector (nonfinancial corporations, households, and other).
- Planned enhancements (expected starting with data for 2013):
  - Increased frequency (i.e., semi-annual CPIS data collections).
  - Timeliness (i.e., acceleration in the collection and re-dissemination of data).
  - Scope (i.e., collection on a voluntary basis of information on the sector of the issuer of securities, and on short or negative positions).

### Coordinated Direct Investment Survey (CDIS)
- Background and participation:
  - First conducted in 2009.
  - Conducted in conjunction with interagency partners including the OECD, Eurostat, the ECB, and UNCTAD.
  - Conducted annually since 2010, starting with data for end-2009.
  - Data for the most recent year are released before end-December of the following year, and revised data are released in July.
  - Participation is voluntary and 92 economies currently participate in the survey.
- Purpose and standards:
  - Improve the quality of direct investment position statistics in the IIP and by immediate counterpart economy.
  - Objectives: collect comprehensive and harmonized data, with geographic detail of counterpart country, on direct investment positions.
  - Concepts, coverage, valuation, and classification are consistent with the BPM6 and the fourth edition of the OECD Benchmark Definition of Foreign Direct Investment.
- Database contents:
  - Presents detailed "inward" direct investment position cross-classified by economy of immediate investor, and "outward" direct investment position cross-classified by economy of immediate investment.
  - All participants provide inward data; most provide outward data.
  - Contains breakdowns including separate data on equity and debt positions, and “mirror” data from counterpart economies.

### Bank for International Settlements (BIS) locational international banking statistics
- Scope and frequency:
  - BIS compiles quarterly data on gross balance sheet positions of banks in major banking centers against entities (banks and nonbanks) located in other countries worldwide.
- Concepts and coverage:
  - Cover separate data on cross-border claims and liabilities in all currencies, and claims and liabilities vis-à-vis residents in foreign currency.
  - Data are based on residency and nonconsolidated concepts, consistent with balance of payments and IIP statistics, with a deviation: locational statistics also include banks’ foreign currency positions vis-à-vis residents.
- Breakdown and uses:
  - Provide information by country of residence of counterparties, by major individual currencies, and sectors (only banks and nonbanks).
  - Financial assets and liabilities presented for three aggregated categories: (a) loans and deposits; (b) holdings and own issues of debt securities; and (c) other assets and liabilities (the latter two mainly cover portfolio and direct investment).
  - Aggregated at the country/financial center level and reported by central banks and monetary authorities in large international lending/borrowing centers.
  - Provide measures of: the role of banks in intermediating international capital flows; external debt owed to banks as reported from the creditor side; importance of financial centers and offshore banking activity.
- Note on consolidated banking statistics:
  - BIS also collects and publishes consolidated banking statistics on banks’ on-balance sheet financial claims on the rest of the world; quarterly data cover contractual lending by the head office and all its branches and subsidiaries on a worldwide consolidated basis, net of inter-office accounts. Currently, central banks in 30 countries report aggregate national consolidated data to the BIS for global calculations.

### ECB’s experience in euro area accounts on a from-whom-to-whom basis
- Rationale and analytical uses:
  - Collecting and compiling financial positions and flows on a from-whom-to-whom basis (by debtor/creditor) enriches monitoring of: (a) monetary transmission processes; (b) general government debt; and (c) securities issues and holdings.
- Monetary transmission and monetary aggregates:
  - Integration derived from consolidated financial transactions and balance sheets of the resident money-issuing sector vis-à-vis resident money-holding sectors.
  - Source data: balance sheets of monetary financial institutions (MFI) with breakdowns of deposits, loans, and debt securities by maturity and counterpart sector.
  - From-whom-to-whom presentation of deposits and loans implemented in quarterly euro area accounts; complemented by balance of payments and securities issuance statistics.
  - Money-issuing sector assumed to consist of central bank, resident deposit-taking corporations, and resident money market funds (MFI subsector); moneyholders are remaining resident sectors including remaining financial corporation subsectors and all subsectors of general government.
  - Monetary variables considered: (a) currency (issued by central bank); (b) transferable deposits held with MFIs; (c) deposits redeemable at a period of notice up to and including three months (short-term savings deposits) held with MFIs; (d) deposits with an agreed maturity up to and including two years (short-term time deposits) held with MFIs; and (e) repurchase agreements, money market fund shares or units, and debt securities with an original maturity up to and including two years issued by MFIs (may also cover structured securities and structured deposits).
  - Monetary aggregates derivable: (a) M1 = currency and transferable deposits held with MFIs; (b) M2 = M1 plus short-term savings deposits and short-term time deposits held with MFIs; (c) M3 = M2 plus marketable instruments listed in (e). Sectoral monetary aggregates (e.g., M3 held by households) can be derived.
- Monitoring general government gross debt:
  - General government gross debt or Maastricht debt excludes, as gross consolidated debt, any government debt held as a financial asset by government units; comprises currency and deposits, debt securities, and loans.
  - Maastricht debt broken down by holder/creditor: residents within the euro area or EU and nonresident holders.
  - Holdings by residents calculated as sum held by central bank, other MFIs, other financial institutions, and other residents. Memo item covers debt held by nonresidents inside the euro area.
  - Debt also presented by original and residual maturities and by currency denomination.
- Securities issues and holdings:
  - From-whom-to-whom framework allows detailed presentation of financing and financial investment via securities; useful for monetary policy and financial stability analysis; reveals sectoral compositions and portfolio vulnerabilities.
  - Complexity depends on breakdowns by security subcategory and by creditor/debtor residency, sector, and subsector; selections are essential.
  - ESCB centralized security-by-security database (CSDB):
    - CSDB is a micro database storing information on individual securities to compile flexible statistics.
    - Covers debt securities, equity securities and investment fund shares or units.
    - Attributes include ISIN, name of issuer, residence of issuer, sector/subsector of issuer, issue date, redemption date, type of security, currency, issue price, redemption price, outstanding amount or market capitalisation, coupon payments and dates.
    - Production process: (1) inputs from central banks, government agencies, commercial data providers, securities exchanges; (2) data quality management—merge, store, checks for completeness, plausibility and consistency, corrections; (3) storing individual security data according to classification criteria.
    - Ongoing project to link CSDB to securities holdings statistics for resident holders by sector/subsector and for nonresident holders by linking holder/custodian-provided information at individual security level (often via ISIN) including holder residency/institutional sector/subsector and amount of holdings in currency.
  - Reporting schemes:
    - Two main agent groups: (a) custodians and centralized securities depositories; (b) direct reporters.
    - Most cases: data collected from custodians on a security-by-security basis, including securities holdings of residents from nonresident custodians to derive breakdown by residency of issuer.
    - Direct reporters provide security-by-security holdings with breakdowns by instrument type, maturity, residence of issuer, etc.
  - Implementation note:
    - Establishing an integrated compilation framework for securities issues and holdings statistics with timely, high-frequency data broken down by instrument, currency, maturity, issuing country, and sector/subsector is demanding and cost intensive.
    - ESCB agreed it will take a couple of years to use it for regular production of securities statistics, starting with financial balance sheet data.

### Applying the from-whom-to-whom framework for financial positions and flows
- Rationale:
  - Accounts that show by sector and type of financial instrument the transactions, other economic flows, and positions of financial assets and liabilities vis-à-vis counterpart sector (resident or cross-border) reflect the interconnected global economy more accurately and provide more useful information for dealing with crisis-originating financial positions and flows.
- Policy uses:
  - For multilateral surveillance, financial stability, and policy coordination, sectoral accounts on a from-whom-to-whom basis are powerful tools to provide comparable data for G-20 countries and other economies.
  - Indicators reflecting imbalances may cover: current account data derived consistently from the rest of the world; deficit and debt derived from general government; private savings and debt derived from nonfinancial corporations and household sector accounts.

*Source: _wp1257 - 51.      In the monthly data, positions between general government and the other resident sectors of the economy (content provided).*

### 81.      Transactions on a from-whom-to-whom basis permit to understand how surpluses by

### _wp1257 - 81.      Transactions on a from-whom-to-whom basis permit to understand how surpluses by

### Overview and rationale
- Transactions compiled on a from-whom-to-whom basis show how surpluses by one sector are allocated among different financial instruments and sectors and cross-border, and how deficit sectors meet their financial needs.
- Such compilation captures revaluations and other changes (e.g., mergers and acquisitions) that alter balance sheets.
- The integrated 2008 SNA framework is recommended as the underlying structure because it enforces four consistency rules: (i) vertical consistency, (ii) horizontal consistency, (iii) counterpart consistency, and (iv) stock-flow consistency.

### International coordination and past agreement
- An IMF-OECD Conference of sectoral accounts experts was conducted during February 28–March 2, 2011 at IMF Headquarters.
- The Conference agreed on a basic outline of a reporting template for sectoral national accounts and balance sheets and on timeframes and priorities for implementation.
- The template guidance includes four building blocks:
  - (i) minimum sector and subsector breakdowns;
  - (ii) transactions breakdowns of the current and capital accounts;
  - (iii) financial instrument classification (including debt on remaining maturity and currency composition);
  - (iv) classification of nonfinancial assets.
- There is agreement on the compilation of sectoral accounts and sectoral financial positions and flows on a quarterly frequency with a timeliness of one quarter.
- The relevant international organisations (European Central Bank, Eurostat, OECD, IMF, BIS) are following up these recommendations in a co-ordinated fashion.
- As far as possible the agreed work on sectoral accounts and balance sheets are to be integrated with the implementation of the 2008 SNA planned to be completed by 2014 in many economies.

### Steps in implementing from-whom-to-whom data (sequenced approach)
- Implementation should use an agreed minimum set of categories of assets/liabilities and institutional sectors (main institutional sectors as defined in the 2008 SNA).
- Considering compilation difficulties, implementation could occur in steps:
  - First: accounts for the main institutional sectors by financial instrument category.
  - Next: further breakdown of financial corporations’ accounts by subsector as data sources develop.
  - Later: collect and compile from-whom-to-whom data for selected financial instruments such as loans, deposits, or insurance and pension entitlements.
  - Most challenging: provide detailed from-whom-to-whom data for securities and other negotiable financial instruments due to secondary market transactions.
- The paper suggests a specific sequence of implementation steps:
  a. Traditional financial transactions and positions by main sectors;  
  b. Further details for financial corporations by subsectors and for general government; other economic flows may also be considered;  
  c. From-whom-to-whom financial positions and flows for subsectors of financial corporations and possibly general government;  
  d. From-whom-to-whom financial positions and flows for specific instruments (loans, deposits, some important negotiable instruments); and  
  e. Fully integrated financial positions and flows on a from-whom-to-whom basis by sectors (subsectors) – starting from aggregated subsector and instrument details towards more disaggregated subsector and instrument details.

### Institutional arrangements, resources, and capacity building
- Compilation of sectoral accumulation accounts and balance sheets requires dedicated staff of compilers and analysts plus resources for data collection and processing.
- The division of work among institutions depends on country-specific institutional arrangements; multiple agencies may be involved with explicit and formal coordination mechanisms to ensure roles and responsibilities.
- Technical assistance and training will be required, particularly for countries that have not implemented complete sectoral accounts; regional training formats may maximize resource benefits.
- Given resource constraints for technical assistance, an implementation based on selected pilot countries may be necessary.

### Data collection challenges and confidentiality
- Greater detail from markets and institutional sectors must be weighed against response burden, confidentiality constraints, and data collection and processing costs.
- Data confidentiality may make collection of detailed from-whom-to-whom financial positions and flows problematic when high levels of detail are requested.
- Compromises are needed on levels of aggregation and on choice of data sources.
- As a first step, simplified tables can present creditors’ flows and positions by residency of debtors and by financial instruments (and analogous tables for debtors). At a later stage, full from-whom-to-whom tables can be compiled; Tables 2A and 2B in Annex II provide a proposal.

### Money and credit integration (Annex I — key points)
- Practical challenges arise when integrating money into a from-whom-to-whom framework because definitions of money and of money-issuing, money-holding and money-neutral sectors are not necessarily aligned with the institutional sector classification in Section III.
- Maturity thresholds, valuation methods and recording principles for accrued interest in monetary statistics generally coincide with those recommended for the SNA.
- Table A1 presents moneyholders’ financial transactions in assets that represent monetary claims on the money-issuing sector (resident MFIs).
- Table A2 shows credit as the counterpart to money, revealing how changes in money relate to lending by money issuers (MFIs) to other residents (including acquisition of MFI-issued securities).
- The external counterpart comprises the net external assets of the money-issuing sector. The paper gives the numeric example:
  - Net external assets (external counterpart) = 26 (=150-124)

### Presentation proposals (Annex II — key points)
- A first-step presentation can follow the residence-of-creditor approach: institutional units as creditors holding financial instruments, allocated to economic sectors; holdings form the sector balance-sheet assets and transactions form the sector financial account.
- The proposed Table 2A follows the System of National Accounts 2008 financial instrument categories.
- Amendments may split the financial corporation sector into subsectors (e.g., money-issuing corporations, insurance corporations and pension funds, other financial corporations) and may break down instruments (e.g., deposits, loans, debt securities) by original maturity.
- From-whom-to-whom tables (proposed Table 2B) show positions and flows for instruments acquired by resident sectors and by nonresidents, with a breakdown by institutional sector for resident debtors (resident-sector-by-debtor cells are highlighted in the proposal).
- For residents, nonconsolidated presentation is recommended to cover intra-sectoral flows and positions (diagonal cells).
- Initial compilation should integrate data from monetary statistics, balance of payments, and government finance statistics to capture detailed nonnegotiable instruments (deposits, loans, trade credit, insurance and pension entitlements).

*Source: Excerpt from the IMF working paper discussing compilation and dissemination of sectoral financial positions and flows on a from-whom-to-whom basis (sections 81–95, Annexes I–II).*

### 6.      In a further step, from-whom-to-whom data may be derived by sector and subsector

### _wp1257 - 6.      In a further step, from-whom-to-whom data may be derived by sector and subsector

### Overview and purpose
- From-whom-to-whom data may be derived by sector and subsector for securities based on detailed source data taken from financial statements or from securities databases.
- The text presents tabular frameworks to classify financial instruments and acquisitions in a from-whom-to-whom framework by residency and resident sector of creditor and debtor.

### Table 2A — Financial Instruments Classified by Creditor Sector and Residency of Debtor
- Structure: creditor by residency and by financial instrument category cross-classified with debtor sectors (residents, nonresidents) and resident subsectors.
- Creditor sectors and subsectors listed (exact labels preserved):
  - Nonfinancial corporations
  - Financial corporations
  - General government
  - Households and nonprofit institutions serving households
  - All creditors
- Financial instrument categories (exact labels preserved):
  - Monetary gold and SDRs
  - Currency and deposits
  - Debt securities
  - Loans
  - Equity and investment fund shares or units
  - Insurance, pension and standardized guarantee schemes
  - Financial derivatives and employee stock options
  - Other accounts receivable/payable
- Residency breakdown preserved: Residents, Nonresidents, All debtors.
- Note: A similar table may be compiled which shows financial instruments classified by debtor sector and residency of creditor. (Footnote 21)

### Table 2B — Financial Instruments Acquisitions in a From-Whom-to-Whom Framework
- Structure: creditor by residency and resident sector cross-classified with debtor by residency and resident sector and by financial instrument.
- Creditor resident sectors and subsectors shown (exact labels preserved):
  - Nonfinancial corporations
  - Financial corporations and subsectors
  - General government
  - Households and nonprofit institutions serving households
  - Nonresidents
  - All creditors
- Debtor instrument categories (exact labels preserved):
  - Monetary gold and SDRs
  - Currency and deposits
  - Debt securities
  - Loans
  - Equity and investment fund shares or units
  - Insurance, pension and standardized guarantee schemes
  - Financial derivatives and employee stock options
  - Other accounts receivable/payable
- Residency and counterparty detail preserved for both residents and nonresidents across creditor and debtor sectors and subsectors.

### Implementation and analytical use
- The presented frameworks enable compilation of detailed from-whom-to-whom datasets for securities and other financial instruments using financial statement data or securities databases.
- Such matrices support sectoral interlinkage analysis, balance sheet approaches to financial crises, and surveillance applications by providing creditor–debtor residency and sectoral counterparties for each instrument category.

### Selected bibliography (selection of key works cited)
- A Balance Sheet Approach to Financial Crisis, 2002.
- Handbook on Securities Statistics.
- Flow of Funds Analysis, A Handbook for Practitioners.
- The Financial Crisis and Information Gaps—Report to the G-20 Finance Ministers and Central Bank Governors, Washington, D.C.
- Balance of Payments and International Investment Position Manual.
- Monetary and Financial Statistics Manual.
- Government Finance Statistics Manual.
- System of National Accounts 1993; System of National Accounts 2008.
- Numerous central bank and international organization papers and working papers on sectoral accounts, financial accounts, and uses of flow of funds data.

*Source: _wp1257 - 6.      In a further step, from-whom-to-whom data may be derived by sector and subsector (pages 30–34).*

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