FISIM in the EU

1
FISIM in the EU

• Brian Newson
• Eurostat

2
History

• SNA93 offers option allocate or not.
• ESA95 compulsory, required no allocation,
• but Task force began immediately to define
  methods.

3
Methods tested

• 1. interest receivable on loans between OMI
  OFI
• stocks of loans between OMI OFI
• 2. Method 1 plus interest on securities
• 3. Short-term as 1 and long-term published rates
• 4a. Average lending and borrowing rates FI versus
  other sectors
• 4b. Average 1 and 4a
• 4c. Average 2 and 4a

4
Results of test period

• FISIM can be reasonably allocated
• Beyond a certain point sophistication of methods
  not worthwhile.
• average increase of GDP 1,3
• negative FISIM ?
• occasionally (sticky rates)
• structurally (cross-subsidisation)

5
Method adopted (1)

• Reference rates derived from data
• interest receivable on loans between OMI OFI
• stocks of loans between OMI OFI
• allocate on loans and deposits of FI because the
  FI only control those.
• Requires data to separate
• households final/intermediate consumption,
• transactions non-residents (X,M)

6
Method adopted (2)

• Central Bank output
• sum of costs, because normal method enormous
• Industry breakdown
• allocation based on stocks of loans deposits
  for each industry, otherwise output.
• Constant prices
• base year margin x (stocks loans deposits)/Ip

7
Implementation

• In 2005 all 25 EU Member States must supply NA
  with FISIM allocated
• back data to 1995.