Reconciliation of quarterly non-financial and financial accounts

1
Reconciliation of quarterly non-financial and
financial accounts

• Carina K. Friis
• Danmarks Nationalbank

2
Production of quarterly sector accounts

• Danmarks Nationalbank Quarterly financial sector
  accounts
• Stocks from 1998, transactions and flows from
  2003
• Published first time in 2004 (transactions in
  2006)
• Danmarks Statistik Quarterly non-financial
  sector accounts
• Data from 1990 and onwards
• Published first time in 2008
• Planning to publish integrated accounts in
  January 2010
• Period 2003 and onwards.

3
Why integration?

• User considerations
• A consistent framework will make financial
  accounts more usable.
• Integrated national accounts contribute to the
  analysis of interactions between the financial
  and real economy and thereby contribute to
  appropriate economic and monetary policy.
• Contribution to over-all quality of national
  accounts
• Keeping transparency is an issue

4
The process of integration

• Short-term The non-financial accounts are taken
  as given.
• Medium-term
• Identify further elements which can improve our
  reconciliation
• Exchange of financial-flow data as a input to the
  non-financial accounts (dividends and interest on
  bonds and deposits from MFI- and SEC-statistics).
• Long-term
• Continued and intensified co-operation between
  NSI and NCB.
• Further development of sources.

5
Accumulated statistical discrepancies
6
Selected reconciliation elements to be introduced
in the short run

• S. 2 Close to proportional distribution of
  statistical discrepancies
• S.122 Differences in deposits assets/liabilities
  for MFI vs. MFI
• S.14/S.11 Better estimation of unquoted shares
  (balances and transactions)
• All sectors/Use of AF.7 Only if we can make an
  argument for a timing difference between the
  transaction and the corresponding payment.

7
Reconciliation of S.2

• No clear bias
• In close corporation with the IIP-section (also
  placed in NCB)
• We have chosen to distribute EO by a IIP key.
• Continued work on minimizing EO related to
  coverage, improved quality of sources etc.

8
Reconciliation of S.122
9
S.14 (S.11 residual) The only sector with a
clear bias in statistical discrepancy

• The coverage of unquoted shares issued by S.11
  and held by S.11 and S.14 is limited.
• ?Transactions of unquoted shares between S.11
  and S.14 is NOT neutral to net lending/net
  borrowing.
• Assumption A continued sale of unquoted shares
  from S.14 to S.11
• Among others due to generational changes.

10
Estimation of unquoted shares
Distribution among holders (book-value)
P/B
DANMARKS NATIONALBANK
11
A continued sale of unquoted shares from S.14 to
S.11??

• Preliminary results from Estimation of unquoted
  shares
• Quarterly financial accounts currently
  underestimates unquoted shares issued by S.11.
  (preliminary estimates suggest that the amount of
  unquoted shares is around four times as big as
  quoted shares)
• Both S.14 and S.11 possess considerable amounts
  of unquoted shares issued by S.11 (distribution
  around 30/70).
• Preliminary estimations based on the tax base
  and SEC-data concerning income from stocks.
• A considerable part (more than 50 pct.) of the
  tax base concerns income from unquoted shares.
• A considerable part of the tax base concerns sale
  of unquoted shares.

12
A continued sale of unquoted shares from S.14 to
S.11??

• Existing analysis concerning generational
  changes.
• In the period 1995-2003 on average 13,4 per cent
  of generational changes resulted in sales to
  S.11.
• Sales to S.11 was in particular shares issued by
  S.11
• The likelihood of a sale to S.11 is increasing in
  size of total balance on the corporation in
  question.
• Conclusion Transactions in unquoted shares is a
  major source of statistical discrepancies between
  quarterly Danish financial and non-financial
  accounts of the household and non-financial
  sectors.

13
Way Forward

• 8th of January Publication of a first set of
  reconciled data 2003-2009Q3
• Identification of further elements to enhance the
  quality of the quarterly sector accounts and
  thereby minimizing the need for reconciliation