The Treatment of Nonperforming Loans in Macroeconomic Statistics

Last Updated: July 28, 2017

Electronic Discussion Group
This Electronic Discussion Group (EDG) has been established at the recommendation of the Intersecretariat Working Group on National Accounts (ISWGNA). The purpose is to work towards an acceptable treatment for nonperforming loans in macroeconomic statistics.


Reference documents
As a starting point for the discussion, the following papers have been prepared:


Note that postings to this discussion are moderated and will not appear on the web until after the moderator has approved them.


The serious financial crises that affected several countries since the mid 1990s have led to renewed interest in the question of how macroeconomic statistics should account for nonperforming loans.1 The original criteria used in the System of National Accounts 1993 (1993 SNA) for the treatment of loans were based on important considerations such as the desirability of avoiding entries in the accounts for which there is no sound basis in observable transactions, the need for accounting practices to facilitate comparisons between different economic agents and countries, the need for valuation of loans to be consistent with the debtor's legal obligations, and the need for recommendations to be useful in measures of solvency. However, such criteria have resulted in many cases where the national accounts do not reflect the existence of nonperforming loans in either the flow accounts or balance sheets.

The purpose of the EDG is to determine if additional criteria should be applied to the treatment of nonperforming loans and to make sure that they are consistent with the other major macroeconomic statistical systems (balance of payments, government finance, and money and banking statistics). Such a treatment needs to consider all aspects, such as the definition and valuation of loans in general and nonperforming loans in particular, loans as assets and liabilities, when such loans should be written off, and how interest accruing and arrears should be measured.

The conclusion of the group will be documented in a report that will be circulated for consideration by bodies such as the ISWGNA and the IMF Balance of Payments Statistics Committee.


End of May 2004: IMF position paper posted on EDG.

End of July 2004: Complete an initial draft report. To be circulated to members and posted on the website for further discussion.

End of September 2004: Paper revised and forwarded to AEG for consideration.

1 Also dubbed impaired, nonaccrual, or bad loans.