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MONEY, BANKING ANDFINANCIAL MARKETSTATISTICS IN THE

ACCESSION COUNTRIES

METHODOLOGICAL MANUAL

VOLUME II

May 2003

STATISTICS ON OTHERFINANCIAL INTERMEDIARIES,

FINANCIAL MARKETS ANDINTEREST RATES IN THEACCESSION COUNTRIES

May 2003

© European Central Bank, 2003

Address Kaiserstrasse 29

D-60311 Frankfurt am Main

Germany

Postal address Postfach 16 03 19

D-60066 Frankfurt am Main

Germany

Telephone +49 69 1344 0

Internet http://www.ecb.int

Fax +49 69 1344 6000

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All rights reserved.

Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.

The views expressed in this paper are those of the authors and do not necessarily reflect those of the European Central Bank.

ISBN 92-9181-338-9 (print)

ISBN 92-9181-339-7 (online)

3ECB � Money, Banking and Financial Market Statistics in the Accession Countries - Volume II � May 2003

List of contributors 6

Introduction 8

Bulgaria 11

1 Other financial intermediaries statistics 132 Financial market statistics 183 Securities issues statistics 214 Financial derivatives statistics 275 Monetary financial institution interest rate statistics 296 Contacts at the National Bank of Bulgaria 35

Cyprus 37

1 Other financial intermediaries statistics 402 Financial market statistics 463 Securities issues statistics 584 Financial derivatives statistics 655 Monetary financial institution interest rate statistics 686 Contacts at the Central Bank of Cyprus 73

Czech Republic 75

1 Other financial intermediaries statistics 782 Financial market statistics 843 Securities issues statistics 914 Financial derivatives statistics 985 Monetary financial institution interest rate statistics 1046 Contacts at the Czech National Bank 109

Estonia 111

1 Other financial intermediaries statistics 1132 Financial markets statistics 1163 Securities issues statistics 1204 Financial derivatives statistics 1225 Monetary financial institution interest rate statistics 1246 Contact at the Bank of Estonia 127

Hungary 129

1 Other financial intermediaries statistics 1322 Financial market statistics 1353 Securities issues statistics 1404 Financial derivatives statistics 1455 Monetary financial institution interest rate statistics 1476 Contacts at the National Bank of Hungary 151

Contents

4 ECB � Money, Banking and Financial Market Statistics in the Accession Countries - Volume II � May 2003

Latvia 153

1 Other financial intermediaries statistics 1552 Financial market statistics 1603 Securities issues statistics 1694 Financial derivatives statistics 1765 Monetary financial institution interest rate statistics 1816 Contacts at the Bank of Latvia 185

Lithuania 187

1 Other financial intermediaries statistics 1892 Financial market statistics 1913 Securities issues statistics 1954 Financial derivatives statistics 1995 Monetary financial institution interest rate statistics 2016 Contacts at the Bank of Lithuania 203

Malta 205

1 Other financial intermediaries statistics 2072 Financial market statistics 2103 Securities issues statistics 2124 Financial derivatives statistics 2145 Monetary financial institution interest rate statistics 2166 Contacts at the National Bank of Malta 218

Poland 219

1 Other financial intermediaries statistics 2212 Financial markets statistics 2263 Securities issues statistics 2314 Financial derivatives statistics 2365 Monetary financial institution interest rate statistics 2416 Contact at the National Bank of Poland 245

Romania 247

1 Other financial intermediaries statistics 2492 Financial market statistics 2593 Securities issues statistics 2614 Financial derivatives statistics 2635 Monetary financial institution interest rate statistics 2646 Contacts at the National Bank of Romania 267

Slovakia 269

1 Other financial intermediaries statistics 2712 Financial market statistics 2733 Securities issues statistics 277


4 Financial derivatives statistics 2795 Monetary financial institution interest rate statistics 2816 Contacts at the National Bank of Slovakia 283

Slovenia 285

1 Other financial intermediaries statistics 2872 Financial market statistics 2903 Securities issues statistics 2964 Financial derivatives statistics 3035 Monetary financial institution interest rate statistics 3056 Contacts at the Bank of Slovenia 307


Bulgaria

Bulgarian National Bank: Mr. Andrey ZarevMrs. Katia MinchevaMr. Radi IvanovMrs. Violeta Peicheva

Cyprus

Central Bank of Cyprus: Mrs. Eliana PsimolophitouMrs. Androulla MelifronidouMs. Christina Nicolaidou

Czech Republic

Czech National Bank: Mr. Zbynek KarnetMs. Iva ChrtkovaMr. Josef JilekMs. Magda Gregorova

Estonia

Bank of Estonia: Mrs. Liina Seestrandt

Hungary

National Bank of Hungary: Mr. László LakatosMrs. Erzsébet KozdronyMr. Erik HorgászMrs. Brigitta Sulyok

Latvia

Bank of Latvia: Mrs. Zigrida AustaMrs. Jelena ZubkovaMrs. Gunta Andersone

Lithuania

Bank of Lithuania: Mrs. Jurgita MaslauskaiteMs. Birute GrikinyteMrs. Ausra Buiviene

Statistics Lithuania: Ms. Daiva Bersenaite

Malta

Central Bank of Malta: Mr. Jesmond Pule'Mr. Roderick Psaila

List of contributors


Poland

National Bank of Poland: Ms. Ewa Laskowska

Ministry of Finance: Mr. Maurycy Michalski

National Depository for Securities: Mr. Leszek Kolakowski

Polish Securities and Exchange Commission: Ms. Magdalena JagodzińskaMr. Krzysztof Szewczyk

Warsaw Stock Exchange: Ms. Monika Matlak

Romania

National Bank of Romania: Mr. Virgil Stefanescu

Slovakia

National Bank of Slovakia: Mrs. Jana SuskováMr. Franti�ek SzulényiMrs. Daniela Mareková

Bratislava Stock Exchange: Mr. �tefan Molnár

Financial Market Authority: Mr. Richard Hulín

Slovenia

Bank of Slovenia: Mr. Tomo NaratMrs. Tanja GolobMrs. Ana Gori�ekMrs. Alenka Repovž

European Central Bank Mrs. Nicole De Windt


Background

The main tasks of the European Central Bank(ECB) relate to the collection and productionof euro area statistics. However, the ECBalso has responsibilities under Article 5 ofthe Statute of the European System ofCentral Banks and of the European CentralBank towards Member States of theEuropean Union (EU) which are not yetparticipating in the euro area. The accessionnegotiations, which determine the conditionsunder which each accession country will jointhe EU were successfully completed at theCopenhagen Summit in December 2002. Thealready high level of co-operation with thesecountries can be expected to intensify further.

The initiative to compile a methodologicalmanual for money and banking statistics inthe accession countries was originallylaunched at the first seminar on money andbanking statistics held with the central banksof the 12 accession countries1 at the ECB inFrankfurt am Main on 15 and 16 December1999. It was envisaged that the manual wouldbe published in two volumes.

Volume I was intended to provide informationon the legal and institutional background tothe compilation of those statistics in theaccession countries that are the responsibilityof the ECB�s Money and Banking StatisticsDivision and, specifically, to outline thecurrent definitions used for the collectionand compilation of monetary statistics. It alsodescribed the extent to which the accessioncountries already meet the ECB�s statisticalrequirements (or will do so in the nearfuture) and compile national monetarystatistics that are conceptually consistentwith euro area monetary statistics. Thisvolume was first published in April 2001 andan update is scheduled for publication in thefirst half of 2003.

The present Volume II, which is beingpublished for the first time, is entitled�Statistics on other financial intermediaries,financial markets and interest rates in theaccession countries� (hereinafter referred to

as the �Methodological Manual�). Statistics inthese areas are also required for the conductof monetary policy.

Aim

The aim of Volume II the �MethodologicalManual�, is to describe the statistical datacollection methods used in each accessioncountry and, thereby, to gain a betterunderstanding of the statistics, other thanmonetary statistics, compiled in those countriesthat fall under the responsibility of the ECB�sMoney and Banking Statistics Division. Thepresent edition contains information as at theend of 2002.

Data requirements concerning financialinstitutions outside the monetary financialinstitution (MFI) sector, including collectiveinvestment institutions other than moneymarket funds, are of utmost importance tocomplement monetary statistics. Data on MFIinterest rates are needed to monitor thetransmission of monetary policy, to betterunderstand the structure of financial marketsand to assess financial conditions in differentsectors of the euro area economy. Securitiesissues and non-monetary financial institutionsare an alternative to bank finance forborrowers and a substitute for certain claimson banks, some of which may be included inM3, for lenders. Finally, data on financialmarkets and financial derivatives provideadditional tools to study the changing of thefinancial world.

Structure

The present Volume II consists of 12 countrychapters. Each country chapter comprisesfive sections:

1 Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania,Malta, Poland, Slovakia, Slovenia, Bulgaria and Romania.

Introduction


Section 1 - Other financialintermediaries statistics

Section 1 concerns statistics relating to thebalance sheets of financial institutionsbelonging to the sub-sector �other financialintermediaries� (OFIs), which excludesinsurance corporations and pension funds -S123 of the European System of Accounts1995 (ESA 95). The section provides anoverview of the financial institutionsbelonging to the OFI sector operating in theaccession countries and of the statisticscollected for each type of OFI, together withthe corresponding collection procedures anddata processing and compilation methods.Publication outlets and users of OFI statisticsare also described.

Section 2 - Financial markets statistics

Section 2 concerns financial marketsstatistics. The term �financial markets� refersto money markets, capital markets, foreignexchange markets and commodity markets.In this section, a distinction is made betweendebt markets and asset markets. The sectionprovides an overview of the legal andinstitutional background of financial marketsstatistics (highlighting their importance andthe legal basis for their collection), collectionprocedures, data processing and compilationmethods, publication outlets and users offinancial markets statistics.

Section 3 - Securities issues statistics

Section 3 concerns securities issues statistics.These are statistics pertaining to the primaryissuance, redemption or amounts outstandingof equities, bonds and other debt securitiesas well as other rights related to any ofthese financial instruments. The sectionpresents an overview of the legal andinstitutional background, collection procedures,data processing and compilation methods,publication outlets and users of securitiesissues statistics.

Section 4 - Financial derivatives statistics

Section 4 concerns financial derivatives statistics.The term �financial derivatives statistics�, asused in this section, refers to data related tothe following financial derivatives: options,forward contracts, futures, structured notesand swaps. The section provides an outlineof the legal and institutional background(distinguishing the various basic concepts),collection procedures, data processing andcompilation methods, publication outlets andusers of financial derivatives statistics.

Section 5 - Monetary financial institutioninterest rate statistics

Section 5 concerns MFI interest rate statistics- i.e. statistics on interest rates applied byMFIs on deposits and loans vis-à-vishouseholds and non-financial corporations,excluding central banks and money marketfunds. The term �MFI interest rates� refersto retail interest rates. The section providesan overview of the legal and institutionalbackground, collection procedures, dataprocessing and compilation methods,publication outlets and users of MFI interestrate statistics.

At the end of each country chapter, detailsare included of contacts at the central bankof the respective accession country to whomreaders may address any queries they mighthave.

Status of the Manual

In the accession countries, the MethodologicalManual is available to the general public fromthe central bank of the country concerned.Other interested parties may request copiesfrom the ECB, at the following address:

European Central BankPress DivisionKaiserstrasse 29,D - 60311 Frankfurt am Main


Fax: + 49 69 13 44 7404

The Methodological Manual is also availableon the ECB�s website (http://www.ecb.int).

The Methodological Manual is available in Englishonly. Translations into the national languageof each accession country have been left tothe discretion of the respective central bank.

Bulgaria


Bulgaria

List of abbreviations

ABS annual bookkeeping statement

BGN Bulgarian lev

BIR basic interest rate

BNSC Bulgarian National Securities Commission

BULSTAT Unified Register for Economic/Business Entity Identification

DEM Deutsche Mark

ECB European Central Bank

ESA 95 European System of Accounts 1995

EUR euro

IMF International Monetary Fund

MFI monetary financial institution

n/a not available

NACE Statistical Classification of Economic Activities in the European Communities

NAS National Accounting Standard

NCEA National Classification of Economic Activities

NSI National Statistical Institute

OFIs other financial intermediaries, excluding insurance corporations and pensionfunds

P&L profit and loss

POS public offering of securities - as in �the Law on POS�

SOFIX share price index of the Bulgarian Stock Exchange - Sofia

USD US dollar


Bulgaria

1.1 Legal and institutional background

1.1.1 Introduction

There is currently no primary legislation orany other regulatory act that provides anofficial and mandatory classification of theinstitutional sectors and sub-sectors orapplied methods for the institutionalstructuring of economic and other agents.Nonetheless, in the course of theiroperations, both the National StatisticalInstitute (NSI) and the Bulgarian NationalBank structure the statistical entities inaccordance with the requirements of theEuropean System of Accounts 1995 (ESA 95).

The institutional sector �financial corporations�includes �all entities involved primarily infinancial intermediation and auxiliary financialactivities closely related to financialintermediation�. It also encompasses all non-profit institutions engaged in servicessupporting the financial intermediaries.Financial intermediation implies economicactivities in the course of which aninstitutional entity undertakes obligations forthe purpose of acquiring financial assets byparticipating in financial market operations.Obligations can be assumed by attractingdeposits and other similar investments or byissuing debt securities. Financial intermediariesrestructure the funds attracted by makingloans or by purchasing equity securities ordebt securities. They also assume therespective economic risks within the scopeof their activities. The main criteria forincluding any particular entity in the �financialcorporations� institutional sector are itsbranch classification (letter J - �financialintermediation�) under the NationalClassification of Economic Activities (NCEA- 2001), which is fully harmonised with theStatistical classification of economic activities

in the European Communities (NACE), andits principal source of funding (�own for-profit activity� or �charges for market services�from Nomenclature 10 of the Unified Registerfor Economic/Business Entity Identification(BULSTAT)).

At present, the NSI compiles and publishesdata on the entire financial sector withoutbreaking it down into its (predefined) sub-sectors. These data are presented in theannual sectoral non-financial nationalaccounts. The Monetary Survey drawn up bythe Bulgarian National Bank on a monthlybasis, and the analytical accounts related toit, provide data in compliance with therequirements and standards of money andbanking statistics for the sector encompassingthe monetary financial institutions (MFIs),which includes the �central bank� and �othermonetary financial institutions� sub-sectors(S121 and S122) in accordance with the ESA95.

The �financial corporations� institutionalsector in Bulgaria includes the following typesof entity: the Bulgarian National Bank,licensed commercial banks (which, as hasalready been mentioned, are included in sub-sectors S121 and S122), leasing companies,finance houses, investment funds andpawnshops (covered by sub-sector S123),bureaux de change, management companies,stock exchanges, institutional insurancebrokers, Non-profit institutions providingservices to commercial banks and insurers(S124), insurance corporations, pensioncompanies and voluntary pension funds(S125).

1 Other financial intermediaries statistics


Bulgaria

The Law on the Bulgarian National Bank(Articles 1 (1) and 2) and the Law on Banks(Article 1 (1), (2) and (4), and Articles 3 and11) provide for the scope of sectors S121and S122. Sub-section 2.2.2 of Volume I ofMoney and banking statistics in the accessioncountries: methodological manual, publishedin April 2001, states that the banking sectorencompasses the central bank (the BulgarianNational Bank) and the commercial banks.Sub-section 2.2.2.1 of the same publicationstates that the banking sector includes themonetary authorities and all commercialbanks licensed by the Bulgarian National Bank(including branches of foreign banks). Theclassifications and definitions of theinstitutional sectors of the national economyin monetary statistics are presented intabular form in Table 2 in the same sub-section. Leasing companies and financehouses are also defined by Article 1 (5) ofthe Law on Banks in relation to Article 54(1) of the Law on Public Offering of Securities(Law on POS). Investment funds are definedby Articles 164 and 165 of the Law on POS,in conjunction with Articles 192 and 193(regarding open-end investment funds) andArticles 198 and 199 (regarding closed-endinvestment funds) of the same law. Accordingto the criteria on the scope of MFIs, theinvestment companies currently in place areclassified in sub-sector S123. In future,depending of their asset mix, if open-endinvestment funds meet the ECB�s

requirements on MFIs they will be reclassifiedin sub-sector S122. Pursuant to Article 2 (5)of the Law on Banks, pawnshops �make cashloans on pawn� under a proceduredetermined by the Bulgarian Council ofMinisters. At present, there is no publisheddocument of the Council of Ministersestablishing such a procedure. The activitiesof bureaux de change are regulated byArticles 3 (1) and (2) of the Foreign ExchangeLaw and Regulation No. 16 of the Ministry ofFinance. Management companies and thestock exchange are governed by the Law onPOS, insurance brokers are governed by theLaw on insurance, while the activities of theNon-profit institutions providing services tocommercial banks and Bulgarian insurers aregoverned by general legislation (the TradeAct). The activities of insurance corporationsand autonomous pension funds are governedby the Law on Insurance and theSupplementary Voluntary Pension InsuranceAct. A schematic presentation of thecorrelation between the institutional sectorsas per the money and banking statisticscompiled by the Bulgarian National Bank andthose pursuant to the ESA 95 and the ECBsector classification is given in Table 3 inSub-section 2.2.2.2 of Volume 1 of theMethodological Manual.

The provisions of the laws and otherregulatory documents referred to aboveprovide grounds for the established

TableType and number of financial institutions at the end of 2001 by institutional sector

S121 Central bank 1S122 Licensed and operational commercial banks 35S123 Leasing companies 33

Finance houses 63Investment funds 3Pawnshops n/a

S124 Bureaux de change n/aManagement companies 1Stock exchanges 1Insurance brokers 110Non-profit institutions providing services to financial intermediaries 2

S125 Insurance and reinsurance corporations 32Pension companies 9Pension funds 27


Bulgaria

institutional structure of the financialinstitutions discussed above. This institutionalstructure may undergo changes dependingon the criteria and methods of structuringeconomic agents to be officially adopted inthe future.

Other financial intermediaries (OFIs) providethe following information for statisticalpurposes:

� Leasing companies provide to the NSItheir annual bookkeeping statements(ABSs) in compliance with the generalNational Accounting Standard (NAS 1).The ABS includes a balance sheet, a profitand loss (P&L) account, a cash flowstatement, an equity statement and theannexes to some of these.

� Finance houses submit two types of ABSto the NSI and the Bulgarian NationalBank. Those that have been licensed asinvestment intermediaries under the Lawon POS, file ABSs in accordance withNAS 15 - filing of bookkeepingstatements of investment funds. NAS 15includes a balance sheet, a P&L account,a cash flow statement and an equitystatement. Finance houses that are notinvestment intermediaries submit an ABSas per NAS 1. For the specific needs ofsupervision, all finance houses file abalance sheet and a P&L account withthe Bulgarian National Bank�s BankSupervision Department on a quarterlybasis.

� Investment funds submit ABSs inaccordance with NAS 15 to the NSI andto the Bulgarian National SecuritiesCommission (BNSC). They file a balancesheet and a P&L account with the BNSCon a quarterly basis.

1.1.2 Definitions

The statutory definition of a leasing companyand a finance house is provided in Article 1(5) of the Law on Banks, which states that a

non-bank financial institution shall be a legalentity whose main economic activity is theconduct of one or more of the followingtransactions: financial leasing, equityacquisition and management, transactions inforeign instruments of payment, capitalstructure consultations, industrial strategy,transformation of companies and acquisitionof enterprises, operations regarded asinvestment intermediaries� main activity orfactoring.

The statutory definition of an investmentfund is provided in Article 164 (1) of theLaw on POS. An investment fund is a joint-stock company whose economic activity isthe investment of funds raised through thepublic offering of shares and which operateson the basis of risk hedging. The same lawdefines two types of investment fund. Article193 (1) obliges open-end investment fundsto continuously offer their shares toinvestors at an issue value based on the netvalue of the assets, and to buy them back atthe request of the shareholder at a pricebased on the net value of the assets. Aninvestment fund�s articles of association mustcontain the main goals and limitations of theinvestment activities, the proportions of thedifferent types of securities, the conditionsand procedure for calculating the net valueof the assets, the issue value, the redemptionprice and the size of the dividend, if any. Aclosed-end investment fund has noobligations under Article 193 (1). It issuesonly dematerialised voting shares and cannotissue bonds or other debt securities (Article198 (2) of the Law on POS). A closed-endfund cannot buy back its shares, except inaccordance with the general provisions andthe procedure laid down by the CommercialCode (Article 199 of the Law on POS).

The Law on POS provides no definition of,and imposes no requirements on investors,who may be either legal or natural persons.Articles 195 and 201 of the same law imposestrict requirements with regard to theinstitutional and instrumental structure of thefinancial assets of the investment funds. Theserequirements define open-end and closed-


Bulgaria

end investment funds as entities investingprimarily in debt securities (bond funds).

Pursuant to Articles 194 (2) and (3) andArticle 198 (2) of the Law on POS,investment funds issue only dematerialisedvoting shares. They cannot issue bonds orother debt securities.

1.1.3 The role of OFI statistics

The current Law on the Bulgarian NationalBank provides the legal framework for thepractical implementation of the currencyboard system. Its provisions greatly restrictthe scope for discretionary monetary policy.

Because the OFIs currently in existence inthe country are in a process of establishmentand development, their share in the totalvolume of financial operations is relativelymodest compared with that of thecommercial banks. The former are notobliged to maintain and do not maintainrequired minimum reserves. The limitedsignificance and role of OFIs with respect tothe identification and implementation ofpossible (under the currency board system)discretionary activities in the area ofmonetary policy partly explains the absenceof a well-defined and properly fundedstatistical information system specific to thisinstitutional sub-sector. The lack ofwell-structured data, and of metadatamethodologically harmonised with the ESA95 requirements, also presents a challengewith respect to the deepening andenrichment of the financial analysis,regardless of the body responsible fordeveloping such analysis, and irrespective ofwhether that body is part of the competentadministrative or monetary authorities.

1.1.4 Powers to collect OFI statistics

Pursuant to Articles 3, 4 and 15 of the Lawon Statistics, the NSI collects and processesaccounting data on all OFIs for statisticalpurposes. For the purpose of supervising the

activities of the relevant financial institutionsand by virtue of the secondary legislationadopted by them, the Bulgarian National Bankand the BNSC collect annual and quarterlyaccounting data from the finance houses andinvestment funds respectively.

1.2 Collection procedures

1.2.1 Reporting agents

The type and number of existing and licensed(or registered) OFIs are presented in Sub-section 1.1.1. They are all obliged to providethe information requested by the NSI, theBulgarian National Bank and the BNSC. Dataon the total asset values for the threecategories of OFI have not been compiled todate.

1.2.2 Reporting schemes

The information submitted regularly by eachtype of OFI is described in Sub-section 1.1.1.The main characteristics of the balance sheetdata as per the applicable NationalAccounting Standard are outlined here.

Leasing corporations and finance houseswhich are not investment intermediariesprovide accounting data as per NAS 1. Thelong-term financial assets on the balancesheet as per NAS 1 are divided into �long-term investments� (sub-divided into threegroups of equity securities according to thedegree of control exerted and other (debt)securities) and �long-term receivables� (from�related parties�, from commercial loans andother long-term receivables). Section 1 (6)of the Supplementary Provisions in theAccounting Act defines the concept of�related parties� as parties where one partyis in a position to control the other or toexercise considerable influence over it intaking financial and operational decisions incompliance with the applicable accountingstandards. These are primarily affiliatedenterprises and subsidiaries.


Bulgaria

Current financial assets are grouped into�receivables� (from related enterprises, fromcommercial and bank loans and other currentreceivables), �investments� and �funds�.Long-term and short-term payables aregrouped in a manner analogous to that ofreceivables, with one additional category,namely payables to the �central government�and �social security� institutional sub-sectors.

Finance houses that are not investmentintermediaries and investment funds submitaccounting data as per NAS 15. The balancesheet as per NAS 15 groups current financialassets into funds, short-term investments andreceivables from them, and other currentassets. Long-term financial assets are dividedinto investment portfolio securities, long-term receivables and other long-term assets.Long-term and short-term liabilities arepresented only in general terms. There is nogeographic or sectoral breakdown of thedata.

The accounting data on the population fallinginto sub-sector S123 collected and processedby the different institutions of theadministrative authority and/or the BulgarianNational Bank are compiled in compliancewith the Accounting Act and the relevantNational Accounting Standards. At present,there is no specific statistical methodologicalor compilation framework for informationon the activities of this group of businessentities.

All data are provided in hard copy and onelectronic media.

1.2.3 Time range, frequency andtimeliness of reporting

The time range of the accounting datasubmitted on an annual basis is two years -the accounting year �t� and the precedingyear. Pursuant to the Accounting Act, thereporting, institutionally autonomouspopulation is obliged to provide the followingfor the year �t�:

� annual bookkeeping statements by theend of March in the year �t + 1� (if theyhave no subsidiaries); or

� annual consolidated bookkeepingstatements by the end of June in the year�t + 1� (if they have subsidiaries).

The balance sheet tables, P&L accounts andcash flow statements that are submitted alsocontain data for the year �t - 1�. The equitystatements and the annexes to the variousstatements contain data only for the year �t�.

1.3 Data processing and compilationmethods

1.3.1 Breaks in series

As already stated in Sub-sections 1.1.1 and1.1.3 there is no relatively autonomousstatistical information system for theobservation and analysis of the OFI sub-sector in place in Bulgaria. For this reasonthe development, formulation and introductionof specific procedures with respect topossible breaks in statistical series of datahave yet to be carried out.

1.3.2 Revisions

The specific rules related to the revision ofdata, including the form and frequency oftheir publication, as well as the requiredexplanatory notes will be developed as a partof the future establishment of OFI statistics.

1.4 Publications

There are currently no statistical publicationsin Bulgaria characterising the overalleconomic behaviour of the institutionalentities classified as OFIs. The annual NSIpublication �Major Macro-Economic Indicators�provides sectoral non-financial accounts onlyby institutional sector. Sectoral financialnational accounts have not been developed.


Bulgaria

In the monthly monetary statistics OFIs areincluded in the sector for non-bank financialinstitutions. For a more detailed presentationof the monetary statistics data publications,see Volume 1, Sub-section 2.11.

1.5 Users

In the performance of their specificsupervisory functions and for their owninternal purposes, the Bulgarian National

Bank, the Ministry of Finance and the BNSCcollect and analyse accounting informationonly for certain groups of the financialintermediaries in sub-sectors S123 and S 125(these are finance houses, pension companiesand voluntary pension funds, and investmentcompanies). The data on all of these, togetherwith the data on the other types of financialintermediary and auxiliary financial institutions,are aggregated at the NSI under the �financialcorporations� institutional sector and includedin the sectoral non-financial accounts.

2 Financial market statistics


2.1.1 Definitions

Financial markets are categorised in threegroups: money market, foreign exchangemarket and capital market. A debt/assetmarket division provides the followingsegments:

Debt markets:

(i) Money market: deposits, repurchases ofsecurities, outright trades in short-termdebt securities with an original maturityof less than one year. The core of thismarket is the interbank market.

(ii) Capital market (excluding equities):outright trades in long-term debtsecurities with an original maturityof one year or longer. As well as ordinarygovernment, municipal and corporateissues, this now includes asset-backedsecurities (starting with mortgage-backedsecurities issued by banks). Compensationinstruments were admitted for tradingon the stock exchange in September2002.

Asset markets:

(i) Equity market: corporate share tradingturnover and stock exchange price indices.

(ii) Foreign exchange market: turnover andrates in trading of foreign exchangeagainst the local currency.

2.1.2 The role of financial marketstatistics

Current indicators from the individualfinancial markets facilitate the identificationof the factors affecting the fluctuation ofliquidity in the banking system under thecurrency board system and the monitoringboth of actual and potential availability andof the redistribution of funds. Stored asstatistical data series, they assist in thedelineation of seasonal trends. A comparisonof data from the various segments contributesto the evaluation of the maturity of thefinancial markets as a system.

2.1.3 Powers to collect financial marketstatistics

According to the Law on the BulgarianNational Bank, the main task of the BulgarianNational Bank is to contribute to themaintenance of the stability of the nationalcurrency through implementation of themonetary and credit policy as provided bythat law, and to assist in the establishmentand functioning of efficient paymentmechanisms. The Bulgarian National Bank


Bulgaria

regulates and supervises the activities ofother banks in the country for the purposeof ensuring the stability of the bankingsystem. In the performance of its functions,it may demand any documents or informationfrom banks and may also carry out therequisite examinations.



� Money market statistics: Two categoriesof market participants report directly tothe Bulgarian National Bank: (i) allcommercial banks; and (ii) those non-bank financial institutions that have beenauthorised by the Ministry of Finance andby the Bulgarian National Bank to beprimary dealers in government securities.

� Capital (other than equity) marketstatistics: For government securities, thesame two categories report to theBulgarian National Bank as for the moneymarket: (i) all commercial banks; and (ii)those non-bank financial institutions thathave been authorised by the Ministry ofFinance and by the Bulgarian NationalBank to be primary dealers in governmentsecurities. For other securities, the CentralDepository, a joint-stock company,reports directly to the Bulgarian NationalBank, and the Bulgarian National Bankalso collects data from the website andthe Reuters pages of the Bulgarian StockExchange - Sofia, from the Reuters newsservice and from specialised financialmarket data providers on the internet.

� Equity market statistics: The CentralDepository reports directly to the BulgarianNational Bank, and the Bulgarian NationalBank also collects data from the websiteand the Reuters pages of the BulgarianStock Exchange - Sofia, from the Reutersnews service and from specialised financialmarket data providers on the internet.The official SOFIX share price index ofthe Bulgarian Stock Exchange - Sofia is

taken from the latter�s website and fromthe Reuters news service, and the BSESofia Lazard share price index is receiveddirectly from the Bulgarian partner inthe computation of the index.

� Foreign exchange market statistics: Twocategories of market participants reportdirectly to the Bulgarian National Bank:(i) all commercial banks; and (ii) thosenon-bank financial institutions that havebeen licensed by the Bulgarian NationalBank to operate with foreign exchange.


The data reported to and collected, monitoredand analysed by the Bank Policy Directorateof the Bulgarian National Bank include: fordeposits - amount, interest rate and maturity;for repurchase operations - face value, actualvalue, repurchase value and annual yield; foroutright sales of debt securities - face value,price and market value; for equities - turnoverof the various segments of the organisedmarket and of off-stock-exchange transactionsas well as share price indices; for foreignexchange - amount and exchange rate of thetransactions.

The media of data collection are electronicand paper-based.

Reporting formats and instructions have beenconveyed to reporting entities.


Data collected are mostly of a daily character.Some data concerning transactions betweenthe reporting population and other entitiesare received as monthly figures, notablyinformation on deposits from and credits tonon-financial entities and on portfolios ofprimary dealers in government securities.

As a general rule, daily data are receivedafter the close of the market on the same


Bulgaria

business day or early on the followingbusiness day. Periods of several business daysafter the end of the month are allowed formonthly data.


2.3.1 Basis of calculation and qualitycontrols

The daily data provided by reporting agentsare for actual amounts and prices of individualtransactions (the share price indices arevalues at the close of day). Interest rates inthe monthly reports are weighted averagesand portfolio reports are based on balancesheet data at the end of the month.


In July 1999, the national currency (the lev)was re-denominated, each new lev (BGN)being equivalent to one thousand old levs(BGL). Accordingly, a recalculation of historicdata was carried out in order to obtainuniform data series for the year.

2.3.3 Revisions

Revisions are made daily before publication.

2.4 Publications

2.4.1 First release of data

Daily data on the interbank deposit market,on repurchase agreements and outright salesof government securities, on corporatesecurities and on foreign exchange operations:

� Source: Bulgarian National Bank.

� Type of data: figures on turnover andrates.

� Format of publication: tables.

� Frequency of publication: first publicationon the following business day; mainpublication together with the monthlydata (daily data on corporate securitiesappear only in the monthly publications,together with the day-by-day breakdownand monthly totals of trading ingovernment securities).

� Medium of publication: daily publicationin electronic format (Bulgarian NationalBank�s website and Bulgarian NationalBank pages on the Reuters screen); dailydata are also published monthly inelectronic format (Bulgarian NationalBank�s website) and in hard copy in theBulgarian National Bank�s MonthlyBulletin and the Bulgarian National Bank�smonthly edition of the publicationentitled Government Securities Market.

Monthly data (averages and/or aggregates)on the interbank deposit market, onrepurchase agreements and outright sales ofgovernment securities, on corporatesecurities and on foreign exchange operations:


� Type of data: figures on turnover and rates.


� Frequency of publication: monthly.

� Medium of publication: in electronic format(Bulgarian National Bank�s website) andin hard copy in the Bulgarian NationalBank�s Monthly Bulletin and the BulgarianNational Bank�s monthly edition of thepublication entitled Government SecuritiesMarket. Breakdowns by sector andsegment, analogous to those in theBulgarian National Bank�s annual andsemi-annual reports, appear in internallycirculated bulletins of the Bank PolicyDirectorate.

Annual and semi-annual data (averages and/or aggregates as well as breakdowns by sectorand segment) on the interbank deposit market,


Bulgaria

on repurchase agreements and outright salesof government securities, on corporatesecurities (debt, equity and Bulgarian depositaryreceipts) - domestic on and off-stock-exchange transactions in domestically depositedsecurities and Euromarket issues, and onforeign exchange operations:


� Type of data: figures on turnover and rates.

� Format of publication: tables and text.

� Frequency of publication: annually andsemi-annually.

� Medium of publication: in electronic format(Bulgarian National Bank�s website) andin hard copy in the Bulgarian NationalBank�s annual and semi-annual reports.

2.4.2 Other statistical publications

The statistical publications for financial marketstatistics of the reporting agencies includethe following:

Central Depository:

� Type of data: figures on stock-exchangeand off-stock-exchange transactions:number of transactions and number ofsecurities traded. The figures coversecurities registered at the CentralDepository.


� Frequency of publication: weekly andannually.

� Medium of publication: in electronic format(Central Depository�s website) and inhard copy in the Central Depository�sWeekly Bulletin (for weekly data) and itsAnnual Report (for monthly and annualdata).

Bulgarian Stock Exchange - Sofia:

� Type of data: figures on stock-exchangetransactions: turnover and share priceindex. The figures cover securities tradedon the Bulgarian Stock Exchange - Sofiaand deposited with any depository.

� Format of publication: tables (historicalseries).

� Frequency of publication: daily updateddatabase.

� Medium of publication: in electronicformat (website of the Bulgarian StockExchange - Sofia).

2.5 Users

Among the main users of financial marketsdata are the Bulgarian National Bank, theMinistry of Finance, the Agency for EconomicAnalyses and Forecasts, the BNSC, bodies ofthe European Union (ECB, Eurostat),international financial institutions and thegeneral public (including entities that dealwith research and evaluation, academicinstitutions, etc.).

3 Securities issues statistics


3.1.1 Definitions

The Law on POS, as amended in June andSeptember 2002, when a Law on

Government Debt was also adopted,provides the legal framework for processessuch as the issuance of and trade in securities.

Article 1 (1) states that the Law on POS�shall govern


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(i) the public offering and trade in securities,the issuance and disposal of dematerialisedsecurities, including cases other than bypublic offering, and restrictions concerningthe disposal of securities issued via non-public offering;

(ii) the activities of the regulated securitiesmarkets, of the Central Depository, ofinvestment intermediaries, of investmentand management companies, of naturalpersons directly providing investmentadvice and dealing in securities, as well asthe conditions for carrying out suchactivities;

(iii) the requirements imposed on publiccompanies and other issuers of securities;

(iv) the requirements imposed on personsmanaging and controlling the persons/companies mentioned under (ii) and (iii),as well as on persons possessing morethan 10 per cent of the votes at generalmeeting of persons/companies mentionedunder (ii) and (iii); and

(v) the State control over compliance withthis law�.

According to Article 2 (1), securities subjectto this law are transferable rights registeredon accounts with the Central Depository ordocuments evidencing transferable rights,which - on account of their nature - may beoffered publicly. These securities are:

� equity shares;

� bonds and other debt securities; and

� other rights related to shares, bonds orother debt securities, as well as toforeign exchange rates and interest rates.

Article 2 (2) defines debt securities astransferable claims against the issuer of thesecurities stemming from funds or otherproperty rights lent to that issuer for anincome fixed in advance or to be determinedin the future. Debt securities may also

express other rights where this is notcontrary to the law.

According to Article 4 (1), a public offeringof securities is one or more offers for thetransfer in return for consideration and/orone or more invitations to make an offer forthe acquisition in return for consideration ofsecurities addressed:

(i) to 50 or more persons in one calendaryear; or,

(ii) inter alia through the mass media, to anindefinite number of persons.

According to Article 5, an initial publicoffering is an offering (under the conditionsset out in Article 4) of:

(i) securities offered by their issuer or byan authorised investment intermediaryfor the purpose of subscription;

(ii) securities offered for initial sale by aninvestment intermediary under anunderwriting contract concluded withtheir issuer; or

(iii) the initial sale of an open-end investmentcompany�s shares via its managementcompany or by an authorised investmentintermediary.

An initial public offering is also the offeringof shares for subscription at the constituentmeeting of a company in the process ofconstitution, when 50 or more persons arepresent at the meeting.

According to Article 78 (1), an initial publicoffering of securities shall be allowed if theissuer or the investment intermediary underArticle 5 (1) or (2) publishes a prospectusand a notice, the prospectus and the noticehaving been confirmed in writing in advanceby the BNSC. Pursuant to Article 79 (1), noprospectus shall be required for the initialoffering of securities issued or guaranteed bythe State or by the Bulgarian National Bank.


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According to Article 80 (1), an initial publicoffering under Article 5 may also be carriedout on the regulated securities market.

Article 3 (2) of the Organic Budget Bill statesthat the central government budget deficitshall be covered by funds raised from theissuance of government securities and otherfinancial market operations. This provisionlays down the legal framework for thefinancing of part of the budget deficit.Pursuant to Article 43 (3) of the Law on theBulgarian National Bank, under financialconditions agreed upon by the Minister ofFinance, the Bulgarian National Bank shallact as agent for government debts or fordebts guaranteed by the government.

3.1.2 The role of securities issues statistics

Securities issues statistics facilitate theevaluation of the reallocation of liquidity inthe banking system. They also informpotential issuers about the possible extentof an attraction of funds.

The Ministry of Finance issues interest anddiscount debt securities to finance thecurrent budget deficit, to further theimplementation of structural reform and tooptimise the servicing of government debt.The legal framework for the abovearrangements consists of the Organic BudgetBill and the National Budget Bill for therespective calendar year (coinciding with thefiscal year). At present, there is no separatestatistical system in this area.

3.1.3 Powers to collect securities issuesstatistics

As the national numbering agency, theBulgarian National Bank stores informationon the individual securities as part of theprocess of allocating identifiers. Apart fromsubmitting annual and semi-annual reports,the Central Depository is also obliged underthe Law on POS to provide the BulgarianNational Bank (as well as the Minister of

Finance and the BNSC) with any otherinformation and documents relating to itsbusiness upon request.

In its capacity as a fiscal agent for thegovernment, the Bulgarian National Bank isresponsible for the creation and maintenanceof an electronic system for the registrationof, and trading in, dematerialised governmentsecurities. It holds auctions to sellgovernment securities and is in charge oftheir initial registration. It also makespayments of principal and interest in respectof matured government securities. TheBulgarian National Bank also registersgovernment securities transactions on thesecondary market.

On the basis of a Ministry of Finance decision,and implementing a contract signed betweenthe Ministry and the central bank, theBulgarian National Bank establishes andmaintains an automated system to register,service and manage government obligationsto foreign creditors. This system includesinformation on Brady securities andEurobonds issued by the government.


In compliance with the functions laid downin the Law on the Bulgarian National Bank,and in compliance with the arrangementsbetween the Bulgarian National Bank andthe Ministry of Finance, the Fiscal ServicesDepartment of the Bulgarian National Bankcollects and processes comprehensiveinformation about payments related to, andredemptions of, government securities issues.To this end, a comprehensive informationsystem has been developed. It is intended forand adapted to the specific administrativeand management needs of the Ministry ofFinance. It does not aim to provide statisticalprocessing and analysis of data under theESA 95 or under any other related regulatoryor methodological documents provided bythe European Commission, the ECB or theEuropean Council. The Bank PolicyDirectorate collects and conveys information


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on issuance by any sector as part of itsmarket monitoring. The Informatics andCommunications Directorate stores andprocesses data collected through theidentifier allocation system.

The statistical information system on theprocess of securities issuance is undergoingfurther development.


As mentioned above, pursuant to theprovisions of Article 78 (1) and (2) in Section3 (�Securities transactions�) of the Law onPOS, in order for an initial public offering ofsecurities to be made, there is a requirementto present a prospectus, which must beapproved in advance and in writing by theBNSC. In accordance with Article 80 (1) ofthe Law on POS, the initial public offeringmay also be carried out on a regulatedsecurities market. Pursuant to the provisionsof Section 2 (�Regulated securities markets�)of the Law on POS, the organisation of anofficial securities market (by a stockexchange) or of an unofficial market (by acompany that may incidentally be a stockexchange) may be permitted by the BNSCunder the terms and conditions specified bythe Law on POS.

These legal provisions allow for thepopulation of reporting agents to be definedas a set of institutional agents which haveissued securities in the respective time periodin the above-mentioned manner. Thisdefinition is based on the information aboutnewly issued securities and their issuers andon cases of initial public offerings where aprospectus has been presented, as well as oncases of initial public offerings on a regulatedmarket. In this particular situation, the set ofreporting agents is formed on the basis ofadministrative information.

As, pursuant to Article 127 (1) in Section 3.of the Law on POS, �the issuance anddisposal of dematerialised securities shallbecome effective only after they have been

registered with the Central Depository�,additional information obtained from theCentral Depository on this type of securitymay be used as counterparty information.

In certain cases, an initial public offering(issuance) of securities may be done withoutpresenting a prospectus. Pursuant to Article79 (1) of the Law on POS, this option isavailable for:

� securities issued or guaranteed by theState or by the Bulgarian National Bank;

� securities issued by internationalorganisations of which the Republic ofBulgaria is a member;

� shares that are offered as a result of amerger, acquisition or tender offering; or

� shares from capital increases by a publiccompany, and rights related to them, ifno contravention has been found in boththe preceding and the current year withrespect to the obligations of that publiccompany to disclose information; and

� a number of other specific cases.

In all these cases, the determination of theso-called �general population� of reportingagents requires that statistical approachesand procedures be applied in parallel to (andin addition to) the administrative approach.

As a national numbering agency, the BulgarianNational Bank (Informatics and CommunicationsDirectorate ) collects information from anyissuer that is being allocated an identifier.Aggregate primary market data received fromthe Central Depository (by the Bank PolicyDirectorate) cover all corporate and municipalissues placed in the country.


Market monitoring and identifier allocationprocedures are used for the collection ofsecurities issuance data.


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The compilation of statistical data at theBulgarian National Bank covers mainlydematerialised securities issued in domesticfinancial markets. For physical securities,there are no elaborate channels forinformation, so that news interception hasbeen combined with informal inquiries amongmarket agents in order to make ad hocevaluations of the number and size of suchissues. The placement of securities outsidethe country is a new phenomenon (not yetconcerning corporate issuers) and aconsistent system for capturing them has notyet been developed - information is receivedmainly from indirect sources.

Information on individual securities iscompiled and stored by the BulgarianNational Bank in the process of allocating anidentifier. Apart from the identifier allocationprocedure, information on individualsecurities is extracted from news and datareleases (on placements) from commercialdata providers and data releases from theCentral Depository and the Bulgarian StockExchange - Sofia. Owing to the small numberof non-government issuers, these are stilltreated as one group of corporate issuers. Instatistical surveys (of debt securities)prepared for the ECB, the following divisionhas been applied: central government andother general government; MFIs; and non-financial and non-monetary financialinstitutions. Stock data on the issues arecollected and data on recently introducedredemption operations through the stockexchange are compiled. There is a breakdownof equity and debt instruments in theidentifier allocation procedure, and ISO10962 on the classification of financialinstruments is applied. Primary marketmonitoring distinguishes between moneymarket and bond market instruments.

Data from the identifier allocation procedureare collected in hard copy. Information fromprimary market monitoring is collectedelectronically. Primary market data arecollected in nominal value terms. Specificrequirements such as those of the ECB havebeen taken into account in surveys.


The data collected by the Bulgarian NationalBank for the compilation of the new issuesdatabase are of a daily character. Aggregatefigures submitted by the Central Depositoryusually cover annual periods. Data onindividual securities are received as part ofthe identifier allocation procedure and alsofrom releases by commercial providers onplacements (usually published on the sameday). Aggregate annual data are receivedupon request.


Data compilation and processing are basedon the aggregation of daily transaction figuresand on registration of aggregate levels onparticular dates.


Daily figures contain the specific parameters.Aggregate figures are end-of-period levelsand yearly totals of transactions. Whereapplicable, aggregate figures are cross-checked with data on individual issues.


In July 1999, the national currency (the lev)was re-denominated, and each new lev(BGN) is worth one thousand old levs (BGL).In the corporate sector, the recalculation ofsecurities concerned only equities in practice,since active issuance of debt instruments onlyoccurred afterwards.

3.3.3 Revisions

Revisions are made prior to publication.


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3.4 Publications

The Ministry of Finance publishes a monthlybulletin entitled �Government Debt� whichincludes information on:

� financing the budget deficit throughgovernment securities issues;

� domestic debt dynamics;

� external debt dynamics; and

� a review of international capital markets.

In addition to this bulletin, the BulgarianNational Bank�s Fiscal Services Departmentpublishes a booklet entitled �GovernmentSecurities Market�, which contains furtherinformation on the latest auctions held andupcoming issues, etc.


Daily data on issues and summaries forvariable periods:


� Type of data: identifiers and parameters.


� Frequency of publication: daily for dailyfigures; upon request for summaries.

� Medium of publication: electronic (e-mail).

Annual and semi-annual reviews of issuance:


� Type of data: description of primarymarket activity.

� Format of publication: data within text.

� Frequency of publication: annually andsemi-annually.

� Medium of publication: in electronic format(Bulgarian National Bank�s website) andin hard copy in the Bulgarian NationalBank�s annual and semi-annual reports.Monthly reviews appear in internallycirculated bulletins of the Bank PolicyDirectorate.


The statistical publications of reporting ordata providing agencies include the following:

Central Depository publications

� Type of data: registrations of securitieswith the Central Depository and deletedregistrations.


� Frequency of publication: weekly.

� Medium of publication: in hard copy andin electronic format (Central Depository�sWeekly Bulletin); a list of registeredsecurities is available on the CentralDepository�s website.

Bulgarian Stock Exchange - Sofia publications:

� Type of data: admittance of securitiesfor trading by the Bulgarian StockExchange - Sofia.

� Format of publication: data within text.

� Frequency of publication: daily.

� Medium of publication: in electronic format(news releases stored on the website ofthe Bulgarian Stock Exchange - Sofia); alist of securities admitted for trading isavailable on the stock exchange�s website.

3.5 Users

Among the main users of securities issuesstatistics are the Bulgarian National Bank,


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the BNSC, the Central Depository, theBulgarian Stock Exchange - Sofia, commercialbanks, investment intermediaries, theAssociation of National Numbering Agenciesand the ECB.

The Bulgarian National Bank�s annual andsemi-annual reports, containing primarymarket reviews, and the bulletin and bookletmentioned above are available to the generalpublic.


4.1.1 Definitions

The most general conceptual framework forthe economic content of the concept of�financial derivatives� (�derivative financialinstruments�) is provided by NationalAccounting Standard 32 - Financialinstruments. Paragraph 1.10 of NAS 32provides the following definition:

� A �derivative financial instrument� is afinancial instrument creating rights andobligations that are manifested in thetransfer of one or more of the financialrisks inherent in the non-derivativefinancial instrument. A derivative financialinstrument requires next to no initial netinvestment, it is redeemed on a futuredate and its value varies with a predefinedvariable (a specific interest rate, the priceof a security, the price of a commodity,currency exchange rate, credit rating,price index, rating index, credit index,and the like).

� Derivative financial instruments do notentail the transfer of the non-derivativefinancial instruments upon contractorigination; such a transfer is notmandatory even when they mature.

� Derivative financial instruments are, forexample: financial options (put, call, etc.);futures contracts; forward contracts;swaps (interest-rate, currency, etc.) andother transactions meeting the definitionfor such.

Article 27 (5) of the Bulgarian AccountingAct states that:

4 Financial derivatives statistics

� all contingent assets and liabilities shallbe accounted for in an off-balance-sheetway; and

� such assets and liabilities shall berecognised and evaluated in compliancewith the accounting standards.

Derivative instruments are shown in theaccounts of the commercial banks (theformat and content of which are determinedby the Bulgarian National Bank) as a part ofthe off-balance-sheet liabilities on the balancesheet and in detail in Annex 17 �Off-Balance-Sheet Liabilities�. In the annex, derivativeinstruments are grouped into �interest-ratecontracts� and �currency contracts�. Bothtypes of contract are further divided intofutures, forward and swap contracts andoptions.

The conceptual definitions of the broadlyformed categories of financial derivativeinstruments in Bulgaria are as follows:

Options: According to Section 1 (5) of theSupplementary Provisions in the Law on POS,an �option� is a security which representsthe right to buy or sell a certain number ofsecurities at a pre-determined price until theexpiry of a specified period or on a specifieddate. Section 2 (4) of the SupplementaryProvisions in the Law on Stock Exchangesand Market-Places states that an �optiontransaction� is a transaction between theparties that one of the parties shall, at aspecified time and in return for the paymentof a specified premium, acquire the right tobe, by virtue of a unilateral declaration, thebuyer or seller respectively of a specifiedtype of commodity at a pre-determined pricewithin a specified period. The other party


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shall undertake the obligation to be atransaction counterparty.

The definition of �option� given in the Lawon POS corresponds to the text of paragraph567 (b) of the ESA 95, and the definition of�option transaction� in the Law on StockExchanges and Market-Places corresponds toparagraph 5.67 (a). The national definitionsgiven above have been harmonised with thetext of paragraph 258 in Annex 5.1 �StatisticalTreatment of Financial Derivatives� of theIMF�s Monetary and Financial StatisticsManual, 2000.

Forward contracts: Section 2 (2) of theSupplementary Provisions in the Law onStock Exchanges and Market-Places statesthat a �forward contract� is a transactionwhere the parties sell or buy a commodity ata price specified at the time of its closureafter establishing the delivery date.

This definition of the term �forwardcontract� corresponds in full to the definitiongiven in paragraph 256 of the IMF�s Monetaryand Financial Statistics Manual, 2000.

Futures: Section 1 (6) of the SupplementaryProvisions in the Law on POS states that�futures� are a standardised security, whichmust be traded on regulated securitiesmarkets and represents the right and theobligation to buy or sell a specific number ofsecurities at a pre-determined price on aparticular date. Section 2 (3) of theSupplementary Provisions in the Law onStock Exchanges and Marketplaces states thata �futures transaction� is a stock exchangetransaction at a given time where the partiesundertake the obligation to buy or sell aparticular type of a commodity on apredetermined date at a price specified onthe date of closure of the futures transaction.The execution of the futures transaction isensured in accordance with the instructionsof the parties by means of the clearing system.

The definition of �futures� given in the Lawon POS corresponds to that in paragraph

5.67 (c) of the ESA 95, although it isnarrower inasmuch as it concerns relationsbetween economic agents in respect ofsecurities (and not commodities or foreignexchange). The above-mentioned paragraphof the Law on Stock Exchanges andMarketplaces supplements the definitiongiven in the Law on POS by explicitlymentioning a �concrete class of commodity�as a base when concluding the �futurescontract�. In this way, the national �futures�definition given in the above-mentioned lawscorresponds to that given in paragraph 5.67(c) of the ESA 95. It also corresponds toparagraph 256 of the IMF�s Monetary andFinancial Statistics Manual, 2000.

Structured Notes: No specific characteristicsfor this type of security are provided inprimary or secondary legislation in Bulgaria.

Swaps: The Bank Accounting Manual drawnup by the Unification and Banking StandardsCommittee and issued by the BulgarianNational Bank in 1993 defines a �swaptransaction� as a �transaction where asecurity with a particular price is sold to abuyer in return for his purchase of a securityof the same value, as well as a combinedcurrency transaction, where the purchase andsale of one type of currency is related to thesimultaneous purchase and sale of the sameamount of the other currency.�

Strictly speaking, the definition of �swap�concerns �spot� deals only. Viewed in a widerperspective, materialisation of the purchaseand sale transactions with securities andforeign currency within a pre-defined period,as referred to in the Bank AccountingManual, can be regarded as an �interest rateswap� or a �currency swap� as defined inparagraph 5.67 (d) of the ESA 95. The widerinterpretation of the national definition of�swap� is also compatible with the text ofparagraph 256 of the IMF�s Monetary andFinancial Statistics Manual, 2000.


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4.1.2 The role of financial derivativesstatistics

Financial derivative statistics (as a componentpart of macroeconomic statistics) are notcompiled in Bulgaria. At the current stage,the monitoring and analysis of the country�seconomic development, as well as theformulation and implementation of themonetary policy, to the extent possible underthe currency board system, are based onindicators from other macroeconomicsubsystems. The lack of financial derivativesstatistics is influenced by the fact that thisfinancial market segment is underdeveloped.In the context of the ECB�s criteria ofliquidity, market depth and certainty in value,there is no established market in Bulgaria forthe classes of financial derivatives referredto above. The instruments themselves fail tomeet the requirements of the ESA 95(paragraph 5.66) with regard to theirtradability and/or marketability, and they arenot subject to statistical study in accordancewith paragraph 5.68 (c) of the ESA 95.

The �Bulgarian depository receipts� issuedby some resident financial institutions andbased on securities issued by foreigncompanies are regarded as equivalent totradable financial derivatives in Bulgaria.

4.1.3 Powers to collect financialderivatives statistics

Information on financial derivatives isincluded in the accounts both of financialcorporations and of all other economicentities covered by BULSTAT and the

relevant registers of the Bulgarian NationalBank, the Ministry of Finance, the BNSC andother agencies. These public bodies collectinformation from the economic entitiespursuant to the provisions of the AccountingAct, the Law on Statistics, the Law on theBulgarian National Bank, the Law on POSand other regulatory acts.


At present, there are no separate proceduresfor collecting information about financialderivatives.


At present, there is no separate system forprocessing data on financial derivatives.

4.4 Publications

So far, there has been no regular publicationof systematised statistical data on financialderivatives. Bulgarian National Bank publicationson financial markets contain data on tradingin Bulgarian depositary receipts as a separateitem.

4.5 Users

At present, the users of macroeconomic and/or aggregate statistics are not provided withdata on financial derivatives.

5 Monetary financial institution interest rate statistics


5.1.1 Definitions

Retail interest rate statistics provide a closeinsight into the development of interest rates

for the ordinary retail business of bank vis-à-vis non-banks. The framework provides anunderstanding of the most importantinformation about retail business. Retailinterest rates are those rates that residentMFIs (reporting agents) charge on loans and


Bulgaria

pay on deposits vis-à-vis enterprises1 andhouseholds2, not vis-à-vis general governmentor other banks. Business with non-residents,loans granted in accordance with specialgovernment schemes (subsidised loans) andother preferential loans at rates belowmarket rates are not covered by the retailinterest rate statistics (e.g. loans granted toemployees or loans for the promotion ofagriculture, industry and so on, where thegovernment sets the level of interest rates).

This framework is easy to understand and isaimed at capturing the most importantinformation about retail business. Moneymarket rates (interbank rates) as well asyields on bonds and notes are not coveredby this framework on the grounds that thesecan be gathered directly from the markets.

At present, reporting agents provide MFIinterest rate statistics on new business, i.e.the interest rate statistics include data onthe weighted average interest rates on newlycontracted loans and on newly receiveddeposits during the reference month. Interestrate statistics on outstanding amounts fordeposits are collected for internal analyticalpurposes only and are not a part of theofficially published statistics.

New business means all financial contractsthat specify for the first time the interestrate of the deposit or loan, and allrenegotiations (of the terms and conditionsof the contract) of existing deposits andloans. Extensions of existing depositcontracts that are carried out automaticallyare regarded as new business. Extensions ofexisting loan contracts that are carried outautomatically are not regarded as newbusiness.

Outstanding amounts are defined as the totalof all deposits placed with MFIs (reportingagents) by households and enterprises.

A sector breakdown allowing to separatelyidentify enterprises and households is appliedto all deposits and loans, combined with abreakdown by original maturity (up to one

year or over one year for loans; overnight,�up to one month�, from one month to threemonths�, �from three months to six months�and �from six months to one year� or �overone year� for deposits) and currency(Bulgarian lev (BGN), euro (EUR) or USdollar (USD)).

For the purposes of MFI interest ratestatistics, new BGN loans to households aresub-divided into the following groupsregardless of their size:

� consumer loans granted for the purposeof personal use in the consumption ofgoods and services, i.e. loans secured bywarranty, or by any kind of security otherthan a mortgage, are reported under�consumer loans�;

� housing loans secured by a mortgage andgranted for the purpose of investing inhouse purchases, including building andhome improvements; and

� other loans.

5.1.2 The role of MFI interest ratestatistics

Prior to the introduction of the currencyboard system on 1 July 1997, the BulgarianNational Bank conducted monetary policyand used the basic interest rate3 (BIR) as oneof its monetary policy instruments. This actedas a direct signal for interest rates ondeposits with and loans from commercialbanks. This was also a way of influencing

1 Enterprises means resident non-financial institutions involvedprimarily in the production of goods and services intended forthe market. Non-bank financial institutions are also includedhere. The two sectors have been merged because 97.0% of alldeposits are held by non-financial institutions and 99.3% of allloans are granted to the non-financial institutions (as at the endof May 2002).

2 Households means all resident households regardless of theirsize or structure. Non-corporate enterprises owned byhouseholds producing market goods and services for their ownuse or intended for sale on the market are also included here.

3 The BIR was determined by the Managing Board of theBulgarian National Bank by virtue of a regulatory act and itserves as a reference rate.


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economic development, but, owing to theperiod of transition to a market economy,the effect was often delayed and largelymasked by the considerably stronger impactof structural changes.

Under the currency board system, the BIR4

has ceased to be a monetary policyinstrument of the Bulgarian National Bankand serves only as a reference rate. The linkto interest rates on deposits and loans isbeginning to erode, but this is a relativelyslow process, which has not yet beencompleted.

In recent years, the BIR has usually varied inthe range of 4 to 5%, but it has not beendirectly related to the level of economicactivity in the country. At the same time, in asituation of macroeconomic stabilitycharacterised by low inflation rates, interestrates on deposits have been stable and thoseon loans have shown a trend of slow declineowing to a gradual improvement in businessconditions and growing competition in thebanking sector. As a result, the interest ratemargin has been reduced, but it is still largerthan that in most of the countries intransition to a market economy.

The Bulgarian National Bank collects andcompiles interest rate statistics for thepurpose of monitoring developments in thebanking sector and their impact on thenational economy. Interest rate statisticscover the various instruments and theirbreakdown by currency, maturity,institutional sector, etc. This is a way ofobtaining sufficiently detailed information onthe lending policies of commercial banks. Thisis crucial for the assessment of theircompetitiveness, given the ever wideropening of the Bulgarian banking system tothe rest of the world and, in particular, tothe financial sector of the EU through thefixed exchange rate and the increasingpresence of leading European financialinstitutions as strategic foreign investors.

5.1.3 Powers to collect MFI interest ratestatistics

The Law on the Bulgarian National Bank andthe Law on Banks provide the legalframework for the interest rate statistics.Although there are no explicit provisionscovering interest rate statistics, the collectionof data from the banks is covered by Article4 of the Law on the Bulgarian National Bankand Article 55 of the Law on Banks. Theformer states that the Bulgarian NationalBank can demand any information from thebanks and the latter that banks shall submitreports to the central bank in a format, withspecific contents and to a deadline laid downby the central bank. On the basis of this, theStatistics Directorate of the BulgarianNational Bank has issued methodologicalinstructions and guidelines for thecompilation of interest rate statistics. Theaforementioned legal acts are available onthe Bulgarian National Bank�s website(www.bnb.bg).



The reporting coverage is determined in theform of a census and the reportingpopulation comprises all monetary financialinstitutions (35) residing on the territory ofthe Republic of Bulgaria. These include thecommercial banks, including branches offoreign banks registered in the country. Ofthe 35 commercial banks, 29 are Bulgarianbanks licensed to conduct banking operationsin Bulgaria and abroad, and six are branchesof foreign banks. All of them (100%) submitinterest rate data to the Bulgarian NationalBank. These data are summarised for thehead offices of the banks and for thebranches located in Bulgaria (i.e. excluding

4 Since the implementation of the currency board on 1 July 1997,the BIR has been defined as the yearly yield on three-monthgovernment securities, achieved on each primary auction.


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foreign branches of domestic banks). Thebusiness volume covered is 100% of newloans and deposits.

The Bulgarian National Bank does not quoteretail interest rates.


The national interest rate statistics arecompiled from the data provided by the allcommercial banks on special interest rateforms and in compliance with methodologicalinstructions from the Bulgarian NationalBank. NSI data on the inflation rate calculatedfor the period are used for the calculation ofthe real interest rates on a monthly basis.

Interest rates on deposits are reported on amonthly basis and those on loans on a weeklybasis. All 35 commercial banks operating onthe territory of the country submitinformation to the Bulgarian National Bankaccording to the following breakdown:

By economic sector:

� enterprises; and

� households.

By currency:

� BGN;

� EUR; and

� USD.

Interest rates are monitored in the nationalcurrency (Bulgarian lev), euro and US dollars.

US dollars account for 45% to 50% of thetotal amount of newly contracted loans inforeign currencies and for 65% to 70% of theoutstanding amount of deposits.

By type of deposit:

� overnight deposits;

� time deposits ; and

� savings deposits.

By original maturity of deposit:

� up to and including one month;

� Up to and including three months;

� up to and including six months;

� up to and including one year; and

� over one year.

By type of loan:

� overdrafts;

� loans to enterprises;

� loans to households, namely:

� housing loans;

� other loans; and

� consumer loans.

By original maturity of loan:

� up to and including one year (short-term); and

� over one year (long-term).

Interest rates on deposits are presented fornew business and for outstanding amounts inthe reporting period, while those on loansare reported for new business in the reportingperiod.

Banks report annual nominal interest ratesto one hundredth of a percentage point.

Commercial banks provide their informationelectronically, either on diskette, via theelectronic interbank information system or,since March 2002, via the private virtualnetwork linking the Bulgarian National Bank


Bulgaria

with the commercial banks. This informationis stored in a central database containing allthe information so as to record the entiredata collection history. This database servesas the primary source of information forfurther data processing within the BulgarianNational Bank (for analysis, publication, etc.).

The data from each bank are subjected totechnical control and analysis on a currentbasis, as they are filed with the BulgarianNational Bank, for the purpose of identifyingand removing any errors. The information iscorrected at the Bulgarian National Bankafter receiving correct data via an electronicmedium.

The methodological instructions regardinginterest rate statistics are drafted by theStatistics Directorate and provided to thebanks for implementation together withuniform statistical interest rate forms. Theaccounting rules followed by the commercialbanks and the Bulgarian National Bank areprovided by the Accounting Act (November2001) and International Accounting Standards.5


Broken down by instrument, the time seriesdate back to the following years:

� interest rates on deposits in nationalcurrency: time deposits and overnightdeposits - 1992;

� interest rates on deposits in foreigncurrency: Deutsche Mark (DEM), EURand USD by maturity - 1997;

� interest rates on loans in nationalcurrency: short-term loans - 1992; long-term loans - 1994; and

� interest rates on loans in foreigncurrency - 1995.

The commercial banks provide:

� weekly information - by the end of thesecond business day of the weekfollowing the reporting week; and

� monthly information - by the 15th day ofthe month following the reporting month.



The reporting agents (the commercial banks)submit to the Bulgarian National Bankinterest rates for the respective instrumentcategories averaged for the period. A methodof averaging by weighting the rates in termsof the corresponding amounts is applied. Theweighted-average interest rates arecalculated using the formula:

where Li is the annual nominal interest rate

on deposits or on loans, and Vi is the amount

of the deposit or loan.

The interest rate data provided by thecommercial banks are as follows:

� Average for the period (week, month)for new business:

The Bulgarian National Bank collectsweighted average interest rates on depositson a monthly basis and calculates weightedaverage data for the banking sector.

The Bulgarian National Bank collectsweighted average interest rates on loans

5 The unified National Accounting Standards, which are in linewith the international ones, will be valid until the end of 2002,when the International Accounting Standards are to becomeeffective.

L =

Li .V

i∑n

i=1

Vi

∑n

i=1


Bulgaria

on a weekly basis and calculates weightedaverage rates for the banking sector. Amethod of averaging by weighting ratesin terms of the amounts for individualweeks in the month is applied on amonthly basis.

� At the end of the period for amountsoutstanding:

The Bulgarian National Bank collectsweighted average interest rates ondeposits by amounts outstanding on amonthly basis. The data are intendedsolely for controlling and analyticalpurposes and for internal use.


The national interest rate statistics have beencompiled since 1992. There have been nobreaks in series. New maturities andinstruments have been introduced in theprocess of improving to the interest ratestatistics. In particular, the sectors dealingwith public and private enterprises weremerged. The introduction of a single generalenterprise sector was necessitated by theprocess of privatisation in the two sectorsand by the levelling up of their interest rates.For the purpose of maintaining the timeseries, the historical data were processed atthe Bulgarian National Bank by weighting theinterest rates in terms of the correspondingamounts for the two sectors.

The only case of a break in a series was thereplacement of DEM interest rates by EURinterest rates when the euro was introducedin 1999. Prior to that, the time series dataon interest rates on deposits and on loansrelate to DEM. After that date, interest ratesare for instruments in EUR (including all itsnational legacy currencies).

When a break in series occurs, the beginningof the new series is marked with a specialsign , and an explanation is provided.

5.3.3 Revisions

The principles adopted for the nationalinterest rate statistics with regard to theexecution and disclosure of data revisionsare as follows:

Revisions of already published data can becarried out if:

� the data are erroneous; or

� there is a change in the data coverage.

When revisions are made, the revised dataare marked with a special sign �R� and anexplanation is provided. Revisions areeffected to both the monthly and the weeklydata (if any).

No revisions of already published data oninterest rates have been made, with theexception of the correction of one errordue to imprecise data provided by a reportingagent in November 2002. The data in asubsequent publication were revised and thechange was marked with the sign �R�.

5.4 Publications


The first interest rate statistics came out in1993 as an annual publication of the BulgarianNational Bank�s Money and Banking StatisticsDivision. It contained data for 1992, and theinterest rates were presented by month.Subsequent publications also containedinterest rates on loans and on deposits forthe weeks of the month (i.e. weekly issuesappeared). Publications on the interest ratesapplied by MFIs are now in the form ofweekly brochures distributed by the Moneyand Banking Statistics Division (the weeklyBulgarian National Bank publication: �WeeklyStatistical Information�), containing weeklyand monthly data presented in a tabular andgraphic form.


Bulgaria

At present the weekly statistics are publishedon the fifth business day following thereporting week, and the monthly statisticsare issued after the end of the referencemonth and after the receipt of data oninflation for the month.

The early interest rate publications weredistributed mainly in hard copy. Since 1993,all interest rate publications have been madeavailable both in hard copy and electronically,and they have been displayed on the BulgarianNational Bank�s website since June 1999(www.bnb.bg). The information is presentedin Bulgarian and in English.


The monthly interest rate statistics, compiledby the Money and Banking Statistics Division,are included in the regular publications ofthe Bulgarian National Bank: the monthlynewsletter and the annual and semi-annualreports. All publications are approved by the

Managing Board of the Bulgarian NationalBank. The data published are interest rateson overnight and time deposits and those onshort-term and long-term loans. The dataare presented by month and by type ofcurrency. Both nominal and real monthlyinterest rates are published. The annualreport for the reporting year is published atthe beginning of May in the following year,while the semi-annual report is published inNovember in the reporting year. Themonthly newsletter is published within twomonths of the end of reporting month. Thepublications are available in hard copy andon the Bulgarian National Bank�s website.

5.5 Users

The users of the data are the BulgarianNational Bank, the commercial banks andthe financial sector, the Ministry of Finance,other government institutions, the IMF,Eurostat, the ECB and the general public.

6 Contacts at the National Bank of Bulgaria

Any queries concerning the issues describedin this country chapter should be addressedto:

Mr. Andrey Zarev - ExpertFinancial Markets DivisionBank Policy DirectorateBanking Departmenttelephone: (+359 2) 9145 1605fax: (+359 2) 980 9352e-mail: [email protected]

Mrs. Katia Mincheva - Chief expertMonetary and Banking Statistics DivisionBanking Departmenttelephone: (+359 2) 9145 1448;fax: (+359 2) 980 2425;e-mail: [email protected]

Mr. Radi Ivanov - Head of General EconomicStatistics and Publications DivisionStatistics DirectorateBanking Departmenttelephone: (+359 2) 9145 1837;fax: (+359 2) 980 2425;e-mail: [email protected]

Mrs. Violeta Peicheva - Head of Monetaryand Banking Statistics DivisionBanking Departmenttelephone: (+359 2) 9145 1587;fax: (+359 2) 980 2425;e-mail: [email protected]

To contact MBS Division:

[email protected]


Bulgaria

Cyprus


Cyprus


ABUs administered banking units

AIC approved investment company

CCSSs co-operative credit and savings societies

CHF Swiss francs

CSE Cyprus Stock Exchange

CYP Cyprus pound

CySEC Cyprus Securities and Exchange Commission

DCD Department for Co-operative Development


ECP euro commercial paper

EMTN Euro Medium-Term Note

EU European Union

� or EUR euro

GBP pound sterling

IAS International Accounting Standards

IBUs international banking units

ICIS international collective investment scheme


IPO initial public offering

ISIN International Securities Identification Number

JPY Japanese yen

MCIT Ministry of Commerce, Industry and Tourism


MMF money market fund

MoF Ministry of Finance


Cyprus

MPC Monetary Policy Committee

NIBID Nicosia interbank bid rate

NIBOR Nicosia interbank offered rate


repo repurchase agreement

SSR Statistical Service of the Republic

UCITS undertakings for collective investment in transferable securities

USD US dollar


Cyprus


1.1.1 Introduction

Cyprus has a well-developed marketeconomy and the island�s financial sector hasexhibited rapid growth in recent years, bothin terms of financial intermediation and inthe range and quality of the services on offer.This is related to the high performance ofthe economy, the stable macroeconomicconditions, the development of Cyprus as aninternational business centre and the gradualliberalisation that has taken place in the pastfew years. The establishment of the CyprusStock Exchange (CSE) and the introductionof a new monetary policy framework in 1996boosted the performance of the sectorfurther. As a result, the contribution of thefinancial intermediation sector to the grossdomestic product rose to around 7.8% in2001 compared with 5.3% in 1995.Employment in the sector rose to 15,300and represented 5.1% of the gainfullyemployed population in 2001, compared with4.4% in 1995.

The financial sector in Cyprus is dominatedby the banking sector. Banking, with a historyspanning more than 140 years, is fairly welldeveloped. Although banks are small byinternational standards, they compare wellwith European standards. The banking sectorcan be broadly divided into the followinggroups of credit institutions licensed to carryon banking business: domestic banks,international banking units (IBUs) andadministered banking units (ABUs). There isalso a separate group of credit institutions,that of co-operative credit and savingssocieties (CCSSs).

At the end of 2001, there were 12 domesticbanks with a network of 485 branches. Fourof the banks are foreign-controlled; oneoperates as a branch of a foreign incorporatedbank and the other three are locallyincorporated subsidiaries of foreign banks.Foreign-controlled banks account for around

13% of all banking assets. Moreover, three ofthe domestic banks have operations abroadeither through a branch network or throughsubsidiaries.

The IBUs and ABUs are licensed to operatefrom within Cyprus, but are required toconfine their activities mostly to non-residents and to foreign currencies. As from1 January 2001, IBUs and ABUs have beenpermitted to grant medium and long-termloans in foreign currencies to residents. Atthe end of December 2001, this groupcomprised 26 IBUs and two ABUs.

CCSSs are mutually owned non-profitorganisations established to serve theirmembers and their communities on a co-operative basis. Their activities are basicallyconfined to the core banking services. At theend of 2001, there were 363 registeredCCSSs, most of which are small villageconcerns.

The number of non-bank financial enterprisesis rising. Their contribution to mobilisingsavings and allocating resources forinvestment purposes is developing steadily.These enterprises mainly comprise companiesspecialising in hire-purchase finance, financialleasing and factoring, investment companies,international collective investment schemes(ICISs), stockbrokers, insurance brokers, theCSE, the Cyprus Securities and ExchangeCommission (CySEC), pension and providentfunds and insurance corporations.

Supervision in the financial sector is dividedamong different bodies reflecting thetraditional segregation of the varioussegments of the financial sector. The CentralBank of Cyprus is responsible for theregulation, including licensing and prudentialsupervision, of banks, irrespective of whetherthey are domestic or IBUs, and of ICISs,their managers and trustees. CCSSs aresupervised by the Department for Co-operative Development (DCD), which issubordinate to the Ministry of Commerce,



Cyprus

Industry and Tourism (MCIT). TheSuperintendent of Insurance, under theMinistry of Finance (MoF), is the regulator ofinsurance business. The CySEC is thesecurities markets regulator responsible forthe overall supervision of the functioning ofthe CSE and of firms providing investmentservices. It should also be noted thatlegislation based on EU practices, which willgovern the setting-up and operation of leasingcompanies, is being considered.

Below is a brief introduction to the differenttypes of financial institutions identified thusfar as belonging to the other financialintermediaries (OFI) sector:

� Companies engaged in hire-purchasefinance and financial leasing. The largestof these companies are subsidiaries ofbanks and are subject to the consolidatedsupervision of the Central Bank ofCyprus. In this respect, they are requiredto submit balance sheets on a quarterlybasis, as well as analyses of the sourcesof their funding in a format prescribedby the Central Bank of Cyprus. Thesedata are used only for supervisorypurposes.

� As far as the hire-purchase business isconcerned, an order was in force priorto 1995 which had been issued on thebasis of the Hire-Purchase Law 32/66.This order specified the type of goodsthat could be sold on hire-purchaseterms, as well as the downpayment andinstalment periods for each type oftransaction. The Superintendent of thehire-purchase business was responsiblefor the collection of statistical data onhire-purchase agreements. However,following the liberalisation of the hire-purchase regime, this order wasterminated in 1995 and the sale of goodson hire-purchase terms was left to themarket. Since then, there has been nodirect collection of data on hire-purchasebusiness.

� Companies engaged in factoring, whichare mainly subsidiaries of banks. The onlyinformation submitted by thesecompanies to the Central Bank of Cyprusis for supervisory purposes.

� The investment organisations currentlyin operation are closed-end investmentfunds governed by the Cyprus Securitiesand Stock Exchange Laws of 1993 to2002 (CSE Laws), by the CyprusSecurities and Stock ExchangeRegulations of 1995 to 2002 (CSERegulations) and by the Cyprus Securitiesand Exchange Commission (Establishmentand Responsibilities) Laws of 2001 and2002 (CySEC Laws). The main objectiveof these funds is the collective investmentof capital raised from the public insecurities for the benefit of shareholdersor beneficiaries. Their operation is basedon the principle of shared risks.According to the CSE Regulations thesefunds are subject to the mandatoryreporting requirements for all listedcompanies, which consist of thesubmission of six-monthly reports,preliminary results for the financial yearand a final annual report and accounts. Inaddition, closed-end investment funds arerequired to announce their net assetvalue every fortnight and theirinvestments every quarter. Moreover,these funds are obliged to submit ananalysis of their assets and financialposition to the CySEC on a monthly andquarterly basis, respectively.

� ICISs, which are governed by the LawNo. 47 (I) of 1999 on InternationalCollective Investment Schemes (ICISLaw), are also in operation and can be ofeither limited or unlimited duration. TheCentral Bank of Cyprus has beendesignated under the ICIS Law as thecompetent authority responsible for therecognition, regulation and supervisionof these schemes. The managers of ICISsare required to submit annual reports tothe Central Bank of Cyprus, which


Cyprus

include financial statements, informationon their borrowing portfolio, a reportby trustees, a report by auditors andhalf-yearly financial statements. It shouldbe noted out that there are currently nolocal mutual funds in operation, as theLaw No. 225 (I) of 2002 on Undertakingsfor Collective Investment in TransferableSecurities (UCITS Law) will come intoforce in March 2003.

Regarding the delineation of the borderlinebetween the OFI sector and the monetaryfinancial institution (MFI) sector, thefollowing procedure was followed: banks andCCSSs were identified by their relevantsupervisory authority and have subsequentlybeen checked as to whether they meet thedefinition of �credit institution� as stated inRegulation ECB/2001/13 concerning theconsolidated balance sheet of the MFI sector.In order to examine whether any collectiveinvestment undertakings belonging to the OFIsector meet the definition of money marketfunds (MMFs), operational criteria wereapplied. In particular, in the case of bothICISs and closed-end investment funds, theirinvestment policies, as described in theirpublic prospectuses, were examined. Nocollective investment undertaking was foundto comply with the definition of MMFs.

1.1.2 Definitions

The legal definitions of the financialinstitutions identified thus far as belonging tothe OFI sector are detailed below:

� The largest companies engaged in hire-purchase finance and financial leasing aresubsidiaries of banks and are subject tothe consolidated supervision of theCentral Bank of Cyprus. Following theliberalisation of the hire-purchase regimein 1995, the sale of goods under hire-purchase terms was left to the market.Hire-purchase companies offer theircustomers financing schemes for thepurchase of all types of vehicles,machinery as well as electronic and other

equipment. They also offer leasingfinancing for the purchase of computers.

� Companies engaged in factoring aresubsidiaries of banks and are subject tothe consolidated supervision of theCentral Bank of Cyprus. They offerfactoring and invoice discounting servicesto local businesses for transactions inCyprus or abroad. In addition, theyprovide their clients with working capitalfinance, specialised sales ledgeradministration and debt collectionservices, insurance coverage againstbusiness risk as well as advisory servicesrelating to credit policy and workingcapital management.

� Collective investment undertakingscurrently comprise closed-end investmentfunds and ICISs.

According to the ICIS Law, an ICIS cantake the form of an international fixedcapital company, an international variablecapital company, an international unittrust scheme and an internationalinvestment limited partnership. The soleobject of ICISs is the collectiveinvestment of funds of unit holders andthe units of which, unless providedotherwise by the ICIS Law or any otherlaw applicable thereto or itsconstitutional documentation, are at theoption of unit holders redeemed orrepurchased directly out of the assets ofthe scheme.

A scheme may be designated by theCentral Bank of Cyprus as a scheme tobe marketed to the general public, orsolely to experienced investors, or as aprivate international collective investmentscheme.

Every ICIS scheme, its manager and itstrustee are subject to on-site inspectionsby the Central Bank of Cyprus, as wellas to off-site monitoring. As far as thelatter is concerned, the scheme, itsmanager and its trustee may be required


Cyprus

to provide the Central Bank of Cypruswith information and returns relating toits business.

Following the enactment of the UCITSLaw in December 2002, with entry intoforce on 17 March 2003, the operationof local open-end investment funds,mutual funds and variable capitalcompanies, is expected to start in thefirst half of 2003. These funds will beunder the supervision of the CySEC.

Investment funds currently in operationare closed-end investment funds in theform of limited liability companiesincorporated under the Chapter 113 ofthe Cyprus Companies Law. Once theirsecurities are listed on the CSE, thesefunds are subject to the supervision ofthe CySEC. Investment funds which havetheir securities listed on the CSE underthe category of �approved investmentcompanies (AICs)� (some investmentfunds are categorised as �other companies�)have specific continuing reportingobligations regarding their investments,over and above the mandatory reportingrequirements for all listed companies.


As mentioned in Sub-section 1.1.1, the datacollected from hire-purchase companiescontrolled by banks are used for supervisorypurposes. In particular, the Central Bank ofCyprus ensures that the funding of thesecompanies emanates wholly from their parentbanks and follows developments related totheir aggregate lending.

With regard to ICISs, the annual and half-yearly reports prepared by managers inrelation to each ICIS are only used forregulatory and supervisory purposes by theCentral Bank of Cyprus.

As far as UCITS are concerned, theirrespective managers are required to preparequarterly, half-yearly and annual reports for

the information of unit holders and theCySEC.

Information submitted to the CSE and theCySEC by the listed investment companies isused by the CSE to ensure compliance withits rules and regulations and by the CySECfor supervisory purposes. The financialstatements of these companies are also usedby stockbrokers and investors for purposesof financial analysis.


In the case of hire-purchase companiescontrolled by banks, the Central Bank ofCyprus is empowered by the Central Bankof Cyprus Law No.138( I) of 2002 (CentralBank of Cyprus Law), which replaced LawNo. 48 of 1963 and the Law No. 66(I) of1997 on Banking (Banking Law), to collectany information from banks for officialpurposes. In particular, the Central Bank ofCyprus is authorised under Section 63 of theCentral Bank of Cyprus Law, to request frombanks, government agencies, publiccorporations and any natural person or legalentity to report information and data in theirpossession which are necessary to fulfil itsobjectives and tasks. Moreover, Section 25of the Banking Law, as amended, requiresbanks to submit periodically or at its requestsuch information and within such time asmay be specified by the Central Bank ofCyprus. The reporting scheme is mandatoryfor all the above companies, and theinformation collected is used only forsupervisory purposes.

With regard to ICISs, the Central Bank ofCyprus, in exercising the powers conferredon it by Section 67 of the ICIS Law, hasissued �Regulations on annual and half-yearlyreports� which have to be prepared by therespective managers.

In the case of UCITS, Sections 106, 107 and108 state that the managers of the respectiveUCITS are responsible for the preparationof the quarterly, half-yearly and annual


Cyprus

reports which have to be submitted to theCySEC and be made available to unit holders.Moreover, Section 130 stipulates that theCySEC may collect any data necessary toenable it to fulfil its tasks.

Sections 33 and 35 of the CySEC Lawsprovide for the collection of data from listedcompanies for supervisory purposes only.The information is confidential and can onlybe used for the purpose for which it is collected.

Moreover, the CSE, in accordance with theCSE Laws and the CSE Regulations, has thepower to collect any data from the listedcompanies.



The table below shows the number ofinstitutions identified thus far as belonging tothe OFI sector, broken down by type andtheir importance in terms of total OFI assetsas at 31 December 2001.

Table 1Breakdown of OFIs by type and total assets as at 31 December 2001

Type of OFI Number of Total assets % of totalinstitutions EUR millions

Companies controlled by banks, engaged inhire-purchase and leasing business 5 833 41Factoring companies 3 191 9Listed investment companies (closed-end) 39 1,038 50ICISs 6 * -

TOTAL 53 2,062 100

* In accordance with the ICIS Law, as amended, these schemes have 15 months from the date of recognition to submit their first annualaccounts. This period has not yet lapsed for any of the ICISs currently in operation.


� Companies engaged in hire-purchasefinance and leasing under the control ofbanks are required to submit a balance

sheet and a statement showing thesources of funding to the Central Bankof Cyprus on a quarterly basis. As far aslending is concerned, separate data aregiven for hire-purchase and leasingactivities. In the case of sources offunding, particulars are given for fundingemanating from the parent bank and fromother sources, if any. The information issubmitted in paper form in a formatprescribed by the Central Bank of Cyprus

� The reporting scheme for ICISs includesannual and half-yearly reports. The annualreport comprises financial statements,including a cash flow statement and astatement on movements in the capitaland reserves of the ICISs, furtherinformation on the financial statements,information on borrowing, portfolioinformation and other information regardingthe directors, managers and trustees ofthe ICISs as well as information on theinvestment advisor and a report by thetrustee and the auditor of each ICIS. Thehalf-yearly report includes the balancesheet and the profit and loss account, aswell as other information on the financialstatements. All reports are submitted inhard copy and are prepared in accordancewith the International AccountingStandards (IAS).

� The reporting scheme for UCITS includesquarterly, half-yearly and annual reports.


Cyprus

The annual report comprises financialstatements and further information thatenables investors to evaluate theperformance of the UCITS. The half-yearlyreport comprises of a statement givingat least an analysis of the assets andliabilities of the UCITS, the number ofunits/shares issued, the net value of eachunit/share and information on portfolioinvestment. The quarterly report comprisesa summary statement of assets andexpenditure, a list of those investmentswith a total value in excess of 5% of theassets of the UCITS, or at least the tenlargest investments, and any other relevantinformation.

� The reporting scheme for closed-endinvestment companies listed on the CSEcomprises the following: preliminary resultsfor the financial year; a final annual reportand accounts, including a cash flowstatement; a half-yearly report whichincludes either the profit and loss accountand explanatory notes or financialstatements; a quarterly list of allinvestments with a value exceeding 5%of the assets of the reporting entity,including at least the ten largestinvestments of the reporting entity andan evaluation of these investments. Inaddition, the net asset value per share ofthe reporting entity is required. All reportsare prepared in accordance with the CSEregulations and the applicable IAS, andare submitted both in paper and inelectronic form.


Data on companies engaged in hire-purchasefinance and financial leasing have beencollected on a quarterly basis since September1992. Relevant statistics are submitted tothe Central Bank of Cyprus within 15 daysafter the end of the reference period.

On the basis of regulations issued by theCentral Bank of Cyprus under Section 67 ofthe ICIS Law, ICISs are required to submitannual reports within three months after theend of the financial year (as at 31 December)and half-yearly reports within two monthsafter the end of the reporting period. Itshould be noted that, to date, no accountshave been submitted by ICISs.

Since 1996, when the CSE began operations,listed closed-end investment companies havebeen required to submit to the CSE six-monthly reports within two months afterthe end of the reporting period, thepreliminary results for the complete financialyear three months after the end of thereporting period (two months from 2003onwards), the final annual report andaccounts five months after the end of thereporting period (four months from 2003onwards) and the quarterly report within 20days after the end of the reference quarter.



There is no procedure for the treatment ofbreaks in series since information collectedfrom OFIs is not used for the compilation ofstatistics.

1.3.2 Revisions

As mentioned in Sub-section 1.3.1 above,data collected from OFIs is not used for thecompilation of statistics. However, dataprovided by companies engaged in hire-purchasefinance and financial leasing controlled bybanks may be subject to revisions from timeto time.


Cyprus

1.4 Publications

The Cyprus Stock Exchange

Fact Book:

� Type of data: market data for the listedAICs. Such data comprise CSE indices(highest, lowest, closing), trading activity(value and number of securities traded)and the market capitalisation for theentire AIC sector. There is also data onthe trading (value and number of sharestraded, high/low and closing prices) andnew issues (issued capital, number ofshares, issue price and funds raised) foreach listed closed-end investment company.

� Frequency of publication: approximatelyfive months after the end of the referenceyear.

� Medium of publication: in paper form andalso on the CSE�s website (www.cse.com.cy).

Year Book:

� Type of data: general information, balancesheet and profit and loss account, ratioanalysis, charts concerning the volume,transactions, price and returns of thestocks for each listed company, includinglisted closed-end investment companies.

� Frequency of publication: approximatelysix months after the end of the referenceyear.

� Medium of publication: in paper form.

The Statistical Service of the Republic

Monthly Economic Indicators:

� Type of data: data on CSE indices,including monthly indices for theinvestment companies sector.

� Frequency of publication: quarterly,approximately three months after theend of the reference quarter.


1.5 Users

With regard to hire-purchase companies,data are only used by the Central Bank ofCyprus for supervisory purposes.

As far as ICISs are concerned, data are mainlyused by the Central Bank of Cyprus forregulatory and supervisory purposes, as wellas by investors in the ICISs.

Data concerning closed-end investmentcompanies listed on the CSE are used by theCSE and the CySEC for supervisorypurposes. The financial statements submittedby these companies to the CSE are announcedon the floor of the CSE and the brokers passon this information to their investors.



2.1.1 Definitions

Financial markets in Cyprus comprise themoney market, the capital market, the equitymarket and the foreign exchange market. Noofficial commodity market exists. A briefoverview of each market is found below.

Debt markets

(i) Money market

The money market comprises the interbankmarket and the market for short-termgovernment securities, which are issued bythe Central Bank of Cyprus on behalf of theRepublic of Cyprus in Cyprus pounds (CYP)and in foreign currencies.


Cyprus

The repurchase agreement (repo) market isstill in an early stage of development. So farno repos between domestic banks have beenreported.

The interbank market, which has a relativelyshort history, has been developing steadilyand is becoming an additional source ofshort-term funds for banks. As at the end of2001, the only participants were 12 domesticbanks. The interbank market provides aninvestment outlet for surplus funds or, wherenecessary, a source of borrowing for banksin order to meet their liquidity requirementswithout resorting to the more expensiveLombard facility of the Central Bank ofCyprus. Interbank transactions are confinedto placements (unsecured deposits) of short-term duration. Dealings are for periods ofup to one year. The bulk of transactionsinvolve short-term maturities, as more thanhalf of the funds are placed for periods of upto one month.

The monthly average volume of placementswas in the region of �295 million in 2001.There was no great volatility in the interbankrates, which hovered around 4.9% andremained within the band determined by theofficial rates of the Central Bank of Cyprus.The interest rate for the Lombard facilityand for the overnight deposit facility, 5.5%1

and 2.5% respectively, as at the end of May2002, constitute the upper and lower boundsof the money market interest rates.Variations within this range are associatedwith the liquidity-absorbing or providingoperations of the Central Bank of Cyprus.Benchmark rates for the interbank marketare reflected in the NIBOR (Nicosiainterbank offered rate) and the NIBID(Nicosia interbank bid rate) which are quoteddaily by banks for placements with maturitiesranging from overnight to up to one year.The spread between the bid and offer ratesis 50 basis points.

Short-term government securities: 13-weekTreasury bills were issued on tap basis atfixed prices (administered rates) and wererediscountable at the Central Bank of Cyprus

up to December 1995. Since January 1996,they have been issued in multiples of CYP1,000 by means of auctions which are usuallyheld twice a month. Auctioning allows theinterest rate to vary according to marketconditions. Prices are determined bycompetitive bidding. The public, both naturaland legal persons, has been allowed to takepart in the auction procedure in an effort topromote the development of a morecompetitive environment for the determinationof interest rates. During 2001, primary salesof 13-week Treasury bills amounted to �456million and their average yield fluctuated ataround 6%.

Euro Commercial Paper (ECP) is normallyissued for maturities of up to 12 months ineuro (EUR), US dollars (USD) and Swissfrancs (CHF). The issuance of such paper isexecuted under the �200 million CommercialPaper Programme of the Republic of Cyprus.It is issued and traded on internationalmarkets and offered to non-residentinstitutional investors. This programmeenjoys the Republic of Cyprus� short-termratings of A1 by Standard and Poor�s, P1 byMoody�s and F1 by Fitch Ratings.

(ii) Capital market

The capital market in Cyprus is at anembryonic stage. It basically comprises themarket for long-term government debtsecurities in Cyprus pounds and in foreigncurrencies. There are also very fewcorporate bonds, issued mainly by banks andto a smaller extent by other corporations,which account for a very small proportion ofthe market.

Government debt securities: The Central Bankof Cyprus issues long-term debt securities inCyprus pounds, certain types of which arelisted on the CSE, on behalf of the Republicof Cyprus. The listed securities are traded atprices determined on the CSE floor. The

1 The interest rate for the Lombard facility was reduced to 5,0%in December 2002.


Cyprus

Central Bank of Cyprus has the right tointervene in the secondary market in orderto maintain orderly market conditions. Adescription of these securities is given below:

� 52-week Treasury bills issued in multiplesof CYP 1,000 and offered to the publicby means of an auction, usually held twicea month. They are listed on the CSE andtraded at prices determined on the CSEfloor.

� 2-year, 5-year, 10-year and 15-yearregistered development stocks carrying,as at the end of 2001, an interest rate of4.75%, 5.25%, 5.50% and 6.60% p.a.respectively, payable every six months.These stocks are listed on the CSE andare offered to the public (both naturaland legal persons) by way of bid-priceauctions on competitive or non-competitive bases. Non-competitivebidders pay the average weighted priceat which competitive bids are accepted.The issues are of the conventional type(no index-linked issues) and are all atfixed rates.

� 3-year registered development stockscarrying, as at the end of 2001, aninterest rate of 5.00% p.a., payable everysix months. During the subscriptionperiod, about one week prior to the issuedate, the stock is offered at par and maybe purchased by natural persons throughthe Central Bank of Cyprus, banks, postoffices and stockbrokers. A secondarymarket is maintained by the Central Bankof Cyprus, where redemption prior tomaturity is possible at prices quoted bythe Central Bank of Cyprus.

� 5-year savings certificates are issued onan ongoing basis and are sold to naturalpersons in multiples of CYP 1. Theinterest on such savings certificatesaccrues over five years from the date ofpurchase, resulting, as at the end of 2001,in an average interest rate of 5.15%.Thereafter, interest is compoundedannually. Redemption prior to maturity

is possible at prices determined at thetime of issue that reflect the overalllength of the investment period.

� 7-year savings bonds with nominal valuesof CYP 5 and CYP 10 are entered inregular draws one month after issue andprizes are exempt from income tax. Suchsavings bonds may be redeemed on orafter maturity at CYP 5.50 and CYP 11,respectively.

� Public eurobond notes are issued by theRepublic of Cyprus through the CentralBank of Cyprus in US dollars (USD), euro(EUR), pounds sterling (GBP), Swissfrancs (CHF) and Japanese yen (JPY),normally for maturities of over 12months. They are offered to non-residentinstitutional investors and traded oninternational markets. The issuance ofsuch notes takes place under the EuroMedium-Term Note Programme (EMTN)of the Republic of Cyprus.

Corporate bonds: The majority of corporatebonds in Cyprus pounds are issued bycompanies listed on the CSE, mainly banks.These securities require the issuer to makespecified payments to the holder over apredetermined period. Some of these issuesare convertible bonds, i.e. the holder has theoption to exchange the bond for a specifiednumber of shares in the company at apredetermined time.

Banks have also issued bonds in foreigncurrency in the form of convertible bondsand floating-rate loan stocks.

Asset markets

(i) Equity market

The CSE began operations as a legal entity inthe form of a semi-governmental organisationin 1996 by virtue of the CSE Laws and theCSE Regulations. The CSE is a regulatedexchange where all transactions concerninglisted corporate and government securitiesare carried out. Such securities include


Cyprus

shares, debt securities and warrants. Themain participants in the market are themembers of the CSE (stock brokerage firms),listed issuers and investors. The CSEprepares and publishes the CSE General (All-Share) Index and the FTSE/CySE 20 Index.The CSE General Index is prepared daily onthe basis of all partly and fully paid-up sharesthat are listed on the CSE. The base date is29 March 1996 and the base value is 100. Inaddition to this General Index, the following12 sub-indices are also calculated:

1. Banks;

2. Approved investment companies;

3. Insurance companies;

4. Manufacturing companies;

5. Tourism companies;

6. Trading companies;

7. Building materials and constructioncompanies;

8. Information Technology companies;

9. Financial services companies;

Table 2Shares with the largest market capitalisation as at the end of 2001

% of totalRanking Sector Name of company Market capitalisation market

EUR millions capitalisation

1 Banks Bank of Cyprus Ltd. 1,444.8 20.602 Banks Cyprus Popular Bank Ltd. 813.7 11.60

3 Banks Hellenic Bank Ltd. 362.7 5.17 4 Hotels Aqua Sol Hotels Ltd. 251.2 3.58 5 Financial services companies CLR Financial Services Ltd. 250.8 3.58 6 Financial services companies Suphire Financial Services Ltd. 224.2 3.20 7 Other companies Louis Cruise Lines Ltd. 165.2 2.36 8 Investments Demetra Investment Co. Ltd. 165.2 2.36 9 Manufacturing Lanitis Bros. Ltd. 164.5 2.3510 Financial services companies Sharelink Financial Services Ltd. 119.1 1.70

Total 3,961.4 56.50

10. Fish culture companies;

11. Hotels; and

12. Other companies.

The FTSE/CySE 20 Index comprises the 20select companies listed on the CSE. Theselection of the companies is based upon theground rules for the management of thisIndex. The FTSE/CySE 20 Index has beenestablished by FTSE and the CSE to ensurethat the management and ongoing operationof the FTSE/CySE 20 Index is independentand transparent. The base date is 30November 2000 and the base value is 1000.The CSE is responsible for the dailyoperation of this Index. The CSE alsomonitors all corporate actions and pricechanges and implements all constituents andweighting changes to the Index.

(ii) Foreign exchange market

The foreign exchange market operates withinthe framework of the Exchange Control Lawand the relevant guidelines issued by theCentral Bank of Cyprus. The market makersare the authorised foreign exchange dealers,comprising eleven domestic banks in May2002. Authorisation to deal in foreign


Cyprus

Table 3CSE General Index, market capitalisation and market share by sector as at 31December 2001

Market

Sector CSE General Index capitalisation Market shareend of 2001 EUR millions %

Banks 141.36 2,648.5 37.77Approved investment companies 124.06 382.4 5.45Insurance companies 49.89 74.9 1.07Manufacturing companies 56.36 516.0 7.36Tourism companies 91.28 221.9 3.16Trading companies 32.94 284.7 4.06Building materials and construction companies 55.48 300.8 4.29Information Technology companies 8.36 138.0 1.97Financial services companies 28.66 817.9 11.66Fish culture companies 26.13 30.0 0.43Hotels 79.30 644.2 9.19Other companies 145.96 952.8 13.59

All sectors 129.09 7,012.1 100.00

Table 4Other main CSE statistics

Type of data End of 2001

Number of listed issuers 144Number of listed shares 149Number of trading days in 2001 249CSE General Index (29/3/96=100) 129.09FTSE/CySE20 (30/11/2000=1000) 518.05Number of members 42

exchange is granted on the basis of Article32 (1) of the Central Bank of Cyprus Lawand Article 2 (1) of the Exchange ControlLaw. The latter is scheduled to be abolishedby September 2003.

Within the framework of policy harmonisationwith the EU, the Central Bank of Cyprusproceeded with the liberalisation of spot andforward transactions in the domestic foreignexchange market on 1 January 2001.

The exchange rate of the Cyprus pound isno longer administratively determined by theCentral Bank of Cyprus, but rather by theinterbank market on the basis of supply anddemand within the framework of a euro peg

policy with fluctuation margins of ±15% anda central parity rate of EUR 1.7086 per CYP.The Central Bank of Cyprus monitors theforeign exchange rates in the interbankmarket and is prepared to intervene in orderto contribute to the smooth functioning ofthe market and to determine reasonableforeign exchange rates that safeguard thestability of the currency within the above-mentioned exchange rate policy framework.Furthermore, the Central Bank of Cyprus isresponsible for the organisation of the dailyfixing sessions in which the commercial banksparticipate and at which the official foreignexchange rates of the three major currenciesagainst the Cyprus pound are determined(i.e. the fixing of the CYP/EUR, CYP/USD


Cyprus

and CYP/GBP exchange rates). The fixingexchange rates are published after theconclusion of the session, in replacement ofthe exchange rates announced by the CentralBank of Cyprus daily at 8 a.m., under theheading �CYPR� on the Reuters wire servicesand on its website (www.centralbank.gov.cy).The aggregate value of the foreign exchangetransactions carried out at the fixing sessionsduring 2001 amounted to the equivalent of�1,905 million (average monthly turnover�158.6 million). The euro is the dominantcurrency, followed by the US dollar and thepound sterling.

Below are the main provisions of the newforeign exchange trading system.

Spot foreign exchange market

Domestic banks, which are authorised dealersin foreign exchange, are free to determineand apply their own spot foreign exchangerates in transactions with their customers.

For small transactions, i.e. for transactionsup to CYP 12,000, the following apply:

� Each bank produces and publishes on adaily basis its own sheet of foreignexchange rates for small transactions,which is communicated to the CentralBank of Cyprus at 8 a.m.

� The exchange rates for small transactionsremain stable throughout the day, butcan be re-adjusted according todevelopments in the international foreignexchange markets. Any changes made bythe banks require the prior approval ofthe Central Bank of Cyprus.

� The spreads between the selling andbuying rates of the foreign currenciesmay not exceed 0.6% for the three majorcurrencies (the euro, the US dollar andthe pound sterling), 0.8% for the Swissfranc and the Japanese yen, while nolimits apply to the spreads of any othercurrency quoted by the banks.

For transactions above CYP 12,000, thefollowing apply:

� The foreign exchange rates applicable totelegraphic transfers for all currencieswill be the market rates as determinedat that particular moment by the banks.

� The customer reserves the right torequest that the bank apply the fixingexchange rate, which will be determinedsubsequently during the fixing session at1 p.m. This option applies only to thethree major currencies and the bank isobliged to abide by the customer�s request.

� The spread between the selling andbuying rates remains the same, as in thecase of small transactions.

Forward foreign exchange market

On 1 January 2001, the Central Bank ofCyprus withdrew from the forward foreignexchange market and since then the bankshave been able to buy and sell forwardforeign exchange contracts with each other,with their customers, with their foreigncorrespondents and with the IBUs operatingin Cyprus. The foreign exchange rates forforward delivery are determined by themarket.

Forward foreign exchange contracts can beused by anyone who has entered into acontractual agreement relating to the import/export of goods and services or any otherspecific financial transaction. The forwardcover can be extended to any period,provided that it does not exceed the durationof the underlying contractual obligation.


In the context of the formulation andimplementation of monetary policy, theCentral Bank of Cyprus monitors developmentsin the financial markets.


Cyprus

Money market statistics and, in particular,the business volume and interest ratesprevailing in the interbank market provideinformation on the liquidity conditions andcontribute to the successful conduct of theopen market operations and the steering ofshort-term interest rates.

Moreover, the foreign exchange market datacollection system enables the Central Bankof Cyprus to monitor the foreign exchangemarket in Cyprus and enforce the regulatoryframework of the market, to support exchangeliquidity management and to provide earlywarning signals to the Bank regardingpotential pressures on the Cyprus pound.

The MoF monitors financial marketdevelopments in order to analyse andformulate short-term economic managementmeasures. In particular, developments in thecapital market influence private consumption(wealth effect) and investment (cost ofcapital). Moreover, stock prices have leadingindicator properties and also affectperceptions of economic agents, and thuseconomic activity, employment, inflation, etc.


The Central Bank of Cyprus may requirebanks to submit information on financialmarkets under Section 63 of the CentralBank of Cyprus Law, under Section 25(2) ofthe Banking Law, as amended, and undersub-paragraph (vi) of Section 36 of theExchange Control Law (Chapter 199)enacted in 1952, as amended by Law No. 53of 1972.

Regarding government securities in Cypruspounds issued by the Central Bank of Cypruson behalf of the Republic of Cyprus, theRegister of Holders maintained at the Bankcontains all information on the primary andsecondary market of government securities.In the case of government securities inforeign currency, the Central Bank of Cyprushas the legal power to maintain and

disseminate information regarding the issueof government debt securities.

The CSE, in accordance with the CSE Lawsand CSE Regulations, has the power tocollect any data from the listed companies.

The Cyprus Securities and ExchangeCommission (Establishment andResponsibilities) Laws of 2001 and 2002(CySEC Laws) state that the CySEC maycollect data from market participants forsupervisory purposes only. The informationis confidential and may only be used for thepurpose for which it is collected.



Data on financial markets are collected bythe Central Bank of Cyprus and the CSE.Table 5 shows the types of reporting agentsfor each market.


As mentioned in Sub-section 2.1.4, data onfinancial markets is collected by the CentralBank of Cyprus and the CSE. The differentreporting schemes maintained by eachinstitution are described below.

Central Bank of Cyprus

As regards the interbank market, eachparticipating domestic bank is required tosubmit on a daily basis its placements withother domestic banks, giving the amount, theduration and the interest rate on eachtransaction. Moreover, the NIBOR and theNIBID are collected from Reuters, wherethe participating banks post their rates.

Government debt securities in Cypruspounds and in foreign currency are issued bythe Central Bank of Cyprus on behalf of theRepublic of Cyprus. Since the Central Bankof Cyprus is the sole agent responsible for


Cyprus

Table 5Reporting coverage on financial market statistics in Cyprus

Data providers Type of market

Central Bank of Cyprus– Direct reporting by the 12 domestic banks that participate in the

interbank market. Money market - interbank market– The Central Bank of Cyprus, as the financial agent for the issuance and

management of government securities in Cyprus pounds. Money market and capital market– Lead managers for the issuance and management of the ECP and the EMTN. Money market and capital market– Direct reporting by 11 banks that are authorised foreign exchange dealers. Foreign exchange market

Cyprus Stock Exchange– The CSE, as the only regulated exchange. Capital market and equity market

the issuance and management of governmentdebt securities, all data on issues in Cypruspounds may be produced internally accordingto the purpose for which they are intendedto be used and extracted electronically fromthe Register of Holders. For each holder,this register includes personal data as well asdata for all certificates in the holder�s name,including the series number of the issue, thecertificate number, the issue and due dates,amounts held or redeemed separately foreach issue, the relevant interest rate andinterest paid. All accounts are kept inaccordance with the IAS. As far as issues ofgovernment securities in foreign currency are

concerned, information is obtained on asecurity-by-security basis from the leadmanagers of each issue by telephone, as andwhen required.

Table 6 analyses the types of governmentdebt securities and other relevantinformation as at 31 December 2001.

As far as the foreign exchange market isconcerned, the reporting scheme andreporting requirements are identical for allreporting domestic banks, which areauthorised exchange dealers. The reportingrequirements are as follows:

Table 6Types of government debt securities and other relevant information as at 31December 2001

Type of security Not listed/Listed on Maturity New issues in 2001EUR millions

Debt securities in Cyprus poundsTreasury bills Not Listed 13 weeks 456.0

Listed on the CSE 52 weeks 730.6Registered development stocks

Listed on the CSE 2 years 246.9Not listed 3 years 120.0

Listed on the CSE 5 years 275.9Listed on the CSE 10 years 64.3Listed on the CSE 15 years 7.1

Savings certificates Not listed 40.5Savings bonds Not listed 6.5

Debt securities in foreign currencyEurobond notes Listed on over 12 months -Euro Commercial Paper notes international markets up to 12 months 1,012.0


Cyprus

� daily overnight open foreign exchangeposition, analytically for certaincurrencies (EUR, USD, GBP, JPY, CHF,CAD, and AUD); in summary form forall other currencies and in total. Datacollection is electronic (secured e-mailtransmission and fax);

� daily spot, forward, foreign exchangeswaps, foreign exchange options andforeign exchange futures transactions bycurrency for certain currencies (EUR,USD, GBP, JPY, CHF, CAD and AUD)and in cumulative form for all othercurrencies. Data collection is electronic(secured e-mail transmission);

� for transactions against Cyprus pounds,additional information is collectedregarding the counterparty category(resident/non-resident). For ��large��transactions against Cyprus pounds (i.e.amounts in excess of CYP 0.5 million, i.e.approx. �0.87 million) with non-residents, the identity of the non-residentis also required. Data collection iselectronic (secured e-mail transmission);

� intra-day spot CYP/EUR exchange ratesare collected by telephone or fromReuters; and

� other exchange rates (spot and forward)quoted by authorised dealers aremonitored on individual Reuters screenswithout being recorded in any database.


The CSE, as the only regulated exchangewhere all transactions involving corporateand government securities are carried out, isobliged to publish an official price index, dailyprices and other market data. All of thisinformation is produced via the tradingsystem, which is a fully computerised systemmonitored by the CSE.

During the pre-opening trading session,brokers enter their orders in the tradingengine. When dealing commences, the tradingengine runs an algorithm, which matches andcontrols the orders. There is a full andimmediate disclosure both of the price atwhich each transaction is concluded and ofthe quantity traded. When a transaction ismade, a message appears in the ticker viewof the computer screens of those peopleauthorised, including the CySEC. The detailsof each transaction are stored in a databasefrom which market statistics are produced.

Table 7 provides information by type ofsecurity for all listed securities for 2001.



� For the interbank market, data have beencollected officially on a daily basis since

Table 7Type of security for all listed securities in 2001

Listed securities as at Funds raised through Market capitalisation31 December 2001 new issues during the year 31.12.01 Trading activity

Type Number Value % total

Shares 149 122 3,998 2,092 94.2Warrants 80 6 84 123 5.5Debt securities 48 611 1,496 5 0.3

Government bonds 39 611 1,387 4 0.2Corporate bonds 9 - 109 1 0.1

Total 277 739 5,578 2,220 100.0


Cyprus

1996. Banks are required to submit theirdaily placements by 2.30 p.m. on the sameday. Data on the NIBOR/NIBID havebeen available since March 1999.

� The first issue of government securitiesin Cyprus pounds was made in 1969 anddata have been available since then. Anautomated online system was introducedin April 1999. Statistics may be compiledon an ad hoc basis, depending on theirintended use.

� Regarding government securities issuedin foreign currency, the first issue tookplace in November 1989 and data havealso been available since then. Statisticsmay be compiled on a daily, monthly,quarterly or yearly basis, depending ontheir intended use.

� Before the liberalisation of spot andforward transactions, which took placeon 1 January 2001, data on the exchangerate of the Cyprus pound against thepound sterling, the US dollar, theDeutsche Mark and the Greek drachmahad been available since 1979.

Following the liberalisation of the spot andforward transactions, the followinginformation is available on the foreignexchange market:

� The overnight open foreign exchangepositions, analytically for certaincurrencies (EUR, USD, GBP, JPY, CHF,CAD, and AUD), as well as in summaryform for all other currencies and in total,via fax since the beginning of 2001 andin electronic form by 12 noon on thenext business day (from around 60% ofthe reporting agents, as at March 2002).

� Daily spot, forward, foreign exchangeswaps, foreign exchange options andforeign exchange futures transactions bycurrency for certain currencies (EUR,USD, GBP, JPY, CHF, CAD and AUD)and in cumulative form for all other

currencies in electronic form by 12 noonon the next business day (from around60% of the reporting agents, as at March2002).

� For transactions against the Cypruspound, additional information is collectedregarding the counterparty category(resident/non-resident). Data have onlybeen available for around 60% of thereporting agents since March 2002. Thedata are submitted daily by 12 noon onthe next business day.

� For �large� transactions (i.e. amounts inexcess of CYP 0.5 million or approximately�0.87 million) with non-residents againstthe Cyprus pound, the identity of thenon-resident is also required. The dataare submitted daily by 12 noon on thenext business day.

� Intraday spot CYP/EUR exchange ratesare collected approximately every 30minutes via telephone or Reuters wireservices and are simultaneously enteredinto the database.

� Other exchange rates (spot and forward)quoted by authorised dealers aremonitored on their individual Reutersscreens without being recorded in anydatabase.

Cyprus Stock Exchange

Data collected on securities listed on theCSE, with regard to both shares and debtsecurities, have been available since 1996,when the CSE began operations. Asmentioned in sub-section 2.2.2, the statisticson listed securities are produced via the CSEtrading system, which is a fully computerisedsystem monitored by the CSE.


Cyprus




� As regards the issues of governmentsecurities in Cyprus pounds, data areprocessed on an automated online systemand stored in a relational database. Adhoc reports may be extracted at any timein the format required.

� The data used for the compilation ofgovernment external debt statistics areend-of-period data, except in the case ofstatistics on ECP issuance, whereaveraging is used for the purposes ofcalculating the average holding period andinterest cost. Such average data arecalculated on a volume-weighted basis.

� The data provided on the foreignexchange market are compiled as follows:

� the overnight open foreign exchangeposition is end-of-period data (end-of-day closing balances);

� daily spot, forward, foreign exchangeswaps, foreign exchange options andforeign exchange futures transactions,by currency for certain currencies(EUR, USD, GBP, JPY, CHF, CAD andAUD), and in cumulative form for allother currencies, are daily amountstraded; and

� intraday spot CYP/EUR exchangerates are instant market rates.


The securities market data produced by theCSE are either end-of-period data (e.g.market capitalisation, market share and priceindices) or cumulative data for a period (e.g.data on funds raised and on trading activity).


There is no procedure for the treatment ofbreaks in series relating to financial marketstatistics. A major break in series relating tothe foreign exchange market involved theliberalisation of spot and forwardtransactions in the domestic market on 1January 2001, as a result of which the Cypruspound exchange rate is no longeradministratively determined by the CentralBank of Cyprus.

2.3.3 Revisions

There are no procedures for revisions ofstatistical data on financial market. However,should any revisions of the data collected bedeemed necessary, all relevant adjustmentswill be made and users notified accordingly.

2.4 Publications



Monthly Monetary Survey

� Type of data: data on sales of Treasurybills and registered development stocksby auction include the date of each issue,the amounts announced, tendered andauctioned, data distinguishing betweencompetitive and non-competitive bids andthe interest rates resulting from theauction (average, lowest, highest), whileinterbank market data include monthlyinterbank rates for certain time bands,as well as monthly data on the averagevolume of the interbank market.

� Frequency of publication: approximatelyone month after the reference month.

� Format of publication: in hard copy andon the Bank�s website (www.centralbank.gov.cy).


Cyprus

Monthly Monetary Policy Report

� Type of data: foreign exchange marketdata include daily amounts traded duringthe fixing sessions, while interbankmarket data include monthly interbankrates for certain time bands.

� Frequency of publication: within twoweeks following the meeting of theMonetary Policy Committee (MPC),which is usually held on the secondThursday of the month. The firstpublication appeared in August 2001.

� Format of publication: in hard copy andon the Bank�s website (www.centralbank.gov.cy).

Fixing rates

� Type of data: latest available data on dailyfixing rates.

� Frequency of publication: published dailyat around 1.30 p.m.

� Format of publication: under the heading�CYPR� on the Reuters wire servicesand on the Central Bank of Cyprus�website (www.centralbank.gov.cy).


List of listed securities with number of shares

� Type of data: the stock code, stock name,listing date and total number of sharesare provided for each stock.


� Medium of publication: in excel formaton the website (www.cse.com.cy).

Index Report

� Type of data: lowest, highest and averageprices of transactions; closing, buying andselling prices and number of transactionsby sector.


� Medium of publication: on the website(www.cse.com.cy).

Historical Data

� Type of data: prices and volume for eachsecurity


� Format of publication: electronic.

� Medium of publication: on the website(www.cse.com.cy).

Monthly Bulletin

� Type of data: data include daily data onnumber of transactions and volume,particulars on CSE General and Sectoralindices (closing, highest, lowest), marketcapitalisation by sector and type ofsecurity and number of securities tradedby sector.


� Format of publication: electronic (pdf file).

� Medium of publication: distributed by e-mail; also available on the website(www.cse.com.cy).



Fact Book

� Type of data: indices: CSE General Index,FTSE/CySE 20 index and sectoral indices(closing, highest, lowest), as well as dailyclosing prices for the CSE General Index.

Trading data: monthly data regardingtrading days, number of transactions,turnover in securities and value, yearlydata on trading activity for each sector


Cyprus

and type of security (value, number ofsecurities traded), as well as details forthe trading of each listed security (lowest,highest, closing prices, number ofsecurities traded, value traded, numberof transactions and number of listedsecurities). Market capitalisation: dataregarding market capitalisation for eachsector, as well as details on the shareswith the largest market capitalisation.

Funds raised: particulars regarding initialpublic offerings (IPOs), newly listedcompanies, rights issues and governmentbond issues.

Other information: particulars regardingthe listed �warrants schedule� (expirydate and exercise price and dates) andlisted debt securities (issue date, listingdate, maturity date, coupon rate andcoupon dates).

� Medium of publication: paper form andalso on the website (www.cse.com.cy).

� Frequency of publication: approximatelyfive months after the end of thereference year.

Statistical Service of the Republic

Monthly Economic Indicators

� Type of data: monthly data on interbankrates for certain time bands (lowest andhighest), the average level of theinterbank market and data on the CSEshare price indices by sector.

� Medium of publication: paper form.

� Frequency of publication: every quarter,approximately three months after theend of the reference quarter. From 2002onwards, the plan is to publish it twice ayear.

Statistical Abstract

� Type of data: yearly data on foreignexchange rates.

� Medium of publication: paper form.

� Frequency of publication: annually,approximately six months after the endof the reference year.

2.5 Users

Interbank market data are used mainly bythe Central Bank of Cyprus in the context offormulating the monetary policy framework,as well as for supervisory purposes.

The fixing exchange rates and the amountstraded during the fixing sessions are used byinterested parties. As far as other data onfinancial markets are concerned, particularlyrelating to securities, such data are used bythe Central Bank of Cyprus, the MoF, theCySEC, members of the CSE, the House ofRepresentatives, investors, data vendors,rating agencies, financial analysts, academicsand other researchers.



3.1.1 Definitions

The securities market in Cyprus comprisesdebt securities as well as quoted andunquoted shares. Debt securities are issued

by the government and banks, as well as byany other corporations. For debt securitiesissued by other corporations which are notlisted on the CSE, however, no informationis currently available.

Debt securities issued by the Republic ofCyprus:


Cyprus

� 13-week Treasury bills issued in multiplesof CYP 1,000 and offered to the publicby way of an auction.

� 52-week Treasury bills issued in multiplesof CYP 1,000 and offered to the publicby way of an auction. These securitiesare listed on the CSE.

� 2-year, 5-year, 10-year and 15-yearregistered development stocks offered tothe public (both natural and legalpersons) by way of a bid-price auctionand listed on the CSE. Interest earnedon these stocks by natural persons isexempt from income tax.

� 3-year registered development stocks,which may be purchased only by naturalpersons through the Central Bank ofCyprus, banks, post offices andstockbrokers. During the subscriptionperiod, approximately one week prior tothe issue date, the stock is offered atpar. A secondary market is maintainedby the Central Bank of Cyprus, whereredemption prior to maturity is possibleat prices quoted by the Bank. Interestearned on investments in these stocks isexempt from income tax.

� 5-year savings certificates issued inmultiples of CYP 1 on an ongoing basis,with a maturity of five years from theissue date. Redemption prior to maturitymay be effected at prices determined bythe Central Bank of Cyprus at the timeof issue, which reflect the overall lengthof the investment period. They are soldto natural persons and the interestearned is exempt from income tax.

� 7-year savings bonds with a nominal valueof CYP 5 and CYP 10 are entered inregular draws one month after issue andprizes won are exempt from income tax.Such savings bonds may be redeemed onor after maturity at CYP 5.50 and CYP11 respectively.

� Euro Commercial Paper: notes are issuedby the Republic of Cyprus through theCentral Bank of Cyprus in foreigncurrencies, normally for maturities of upto 12 months, and are offered to non-resident institutional investors. Theissuance of such notes is executed underthe Euro Commercial Paper (ECP)Programme of the Republic of Cyprus.

� Public eurobond issues: notes are issuedby the Republic of Cyprus through theCentral Bank of Cyprus in foreigncurrencies, normally for maturities ofover 12 months, and are offered to non-resident institutional investors. Theissuance of such notes is executed underthe Euro Medium-Term Note Programmeof the Republic of Cyprus.

Debt securities issued by banks and othercorporations:

� Debt securities issued in Cyprus poundsby sectors other than the Governmentrelate to corporate bonds issued bycompanies listed on the CSE (mainlybanks and, to a lesser extent, othercorporations). These securities canguarantee the investor the nominal valueof the bond in a specific time period andmay carry a fixed or fluctuating interestrate. Some of these bond issues areconvertible bonds, i.e. they give theholder the right to convert the bondsinto ordinary shares within a specific timeperiod.

� Debt securities in foreign currencies havethus far been issued only by banks in theform of convertible bonds or floating ratebonds.

Quoted securities other than debt securities:

� Ordinary shares issued by listedcompanies are defined as shares that arelinked to voting rights in the generalmeetings of the respective company�sshareholders and also entail rights to a


Cyprus

share in the company�s distributedoperational profits.

� Warrants are certificates issued by listedcompanies, which involve the right of theholder to buy ordinary shares in therespective company at a specific point intime at a specific price.


Statistics on government securities issues inCyprus pounds are used extensively forpurposes of understanding monetarydevelopments and formulating monetarypolicy by the Central Bank of Cyprus. In thecontext of open market operations, the Bankclosely monitors banking liquidity on a dailybasis. Sales/redemption of governmentsecurities affect liquidity. Conditions and,therefore, data relating to these transactionsare regularly collected and monitored.Moreover, the derived yield curve ofgovernment securities reveals marketexpectations, especially on future interestrates and inflation. The interest rate spreadof government securities in the local andforeign markets is also monitored, as is, inparticular, the ten-year government stockyield with reference to the relevantconvergence criteria. In formulating monetarypolicy, the Central Bank of Cyprus also relieson asset market developments and, especially,on information concerning the CSE. Detailson this matter are given in Sub-section 2.1.2.

Statistics on government securities issues arealso used by the MoF for decision-makingpurposes regarding the financing of thegovernment debt. Moreover, the MoF usesstatistics compiled by the CSE on marketcapitalisation, the volume of trading as wellas the CSE indices for judging the potentialdemand that would exist in the primarymarket for government paper.

The House of Representatives also receivessix-monthly reports on government debtsecurities issued in foreign currencies underthe provisions of the Central Bank of Cyprus

Law and the Law No. 103 of 1989-1999 onTreasury bills, which are submitted by theCentral Bank of Cyprus via the MoF.

Data on securities collected by the CSE andthe CySEC are mainly used for supervisorypurposes.


� Government securities in Cyprus poundsand in foreign currencies are issued bythe Central Bank of Cyprus on behalf ofthe Republic of Cyprus. Registereddevelopment stocks are issued under theDevelopment Law of 1969, while Treasurybills and government securities in foreigncurrencies are issued under the Law No.103 of 1989-1999 on Treasury bills.

� As for government securities in Cypruspounds, a register of holders is maintainedby the Central Bank of Cyprus, fromwhich any statistics can be produced.Details are given in Sub-section 3.2.2. In thecase of government securities in foreigncurrencies, the Central Bank of Cyprus hasthe legal power to maintain and disseminateinformation on external governmentdebt, including public foreign currency issues.

� The CSE has the power, under the CSELaws and the CSE Regulations to collectany data from the listed companies.

� The CySEC Laws empower the CySECto collect data from market participantsfor supervisory purposes only. Theinformation is confidential and may onlybe used for the purpose for which it iscollected.



The Central Bank of Cyprus, as the financialagent for the issuance and management of


Cyprus

government securities, can be considered asthe only reporter of data relating to primaryissues, redemptions and amounts outstandingof such securities.

For the securities (bonds and shares) quotedon the CSE, information is submitted by alllisted companies to the CySEC and the CSE.However, for securities not listed on theCSE, no reporting requirements exist.



� The Central Bank of Cyprus is the soleagent responsible for the issuance andmanagement of government debtsecurities. Therefore, all data ongovernment securities issues in Cypruspounds can be produced internally andare extracted electronically from theRegister of Holders. For each holder,this register includes personal data aswell as data on all certificates issued inthe holder�s name, including the seriesnumber of the issue, the certificatenumber, the issue and due dates, amountsheld or redeemed for each issueseparately, the relevant interest rate andthe interest paid. From this database,statistics can be produced according tothe purpose for which they are intendedto be used. The Central Bank of Cyprususes an internal coding system.

� Moreover, the Republic of Cyprus,through the Central Bank of Cyprus,issues under the ECP and the EMTNprogrammes public eurobonds in foreigncurrencies, which are issued and tradedon international markets. Each issue isassigned a unique I n t e r n a t i o n a lSecurities Identification Number (ISIN).Data on these securities are collected ona security-by-security basis.

Cyprus Securities and ExchangeCommission and Cyprus Stock Exchange

The CySEC and the CSE have commonreporting requirements regarding shares anddebt securities, both for companies seekinglisting and for listed companies.

� Issuers seeking listing on the CSE arerequested to submit a signed applicationsupplemented by various documents forapproval to the Council of the CSE. Themost important of these documents arethe Listing Particulars, which aim to assistpotential investors, in the best waypossible, in making their assessment ofthe asset value, the financial state, thetrack record and the prospects of thecompany seeking listing, as well as of therights associated with the ownership ofthe securities concerned.

In the case of IPOs, the depth and detailof information required for thepreparation of the Listing Particularsmight be quite substantial, whereas theinformation requirements for subsequentissues are less onerous. However, theCouncil of the CSE has the discretionpower, under the conditions set out inRegulation No. 70 of the CSE, to exemptan issuer, either partially or fully, fromthe obligation to prepare ListingParticulars.

Provided that all the procedures havebeen followed, the Council of the CSEproceeds with the granting of permissionfor the publication of the ListingParticulars. Having obtained thispermission, the issuer is obliged toannounce the publication of the ListingParticulars in at least two daily nationalnewspapers within a fortnight. Theannouncement must state the addresswhere interested parties may obtain acopy of the prospectus. Within 48 hours,the issuer has to submit to the Councilof the CSE three copies of the newspapersin which the announcement was made.


Cyprus

Finally, the Council of the CSE has toissue an official announcement stating itsdecision to accept the listing of thespecific certificate and to set a date forthe commencement of trading.

� Once listed on the CSE, companies havecertain continuous reporting obligations,the most prominent of which are shownin the table 8.

In addition to the above reportingrequirements, listed companies are obligedto submit a monthly report with details oftheir listed securities.

� The CSE classifies listed securities asfollows:

Quoted shares:

1. Banking sector;

2. Approved investment companies sector;

3. Insurance corporations sector;

4. Manufacturing companies sector;

Table 8Reporting requirements1 of listed companies on the Cyprus Stock Exchange

Date of submission2 Investment companies Other listed companies

20 January Fourth Quarterly Report for the quarter ending on 31 December of the previous year.

31 March Preliminary results for the complete financial year Preliminary results for the completeending on 31 December of the previous year. financial year ending on 31 December of

the previous year.20 April First Quarterly Report for the quarter ending

on 31 March of the current year.

31 May Annual Report and Accounts for the financial Annual Report and Accounts for theyear which ended on 31 December of the previous financial year which ended on 31year. December of the previous year.

20 July Second Quarterly Report for the quarter endingon 30 June of the current year.

31 August Semi-annual accounts for the six months ending Semi-annual accounts for the six monthson 30 June of the current year. ending on 30 June of the current year.

20 October Third Quarterly Report for the quarter ending on30 September of the current year.

1 All financial statements have to comply with the IAS.2 From 2003 onwards (Circular No. 1/2002, dated 11 January 2002), the deadline for the preliminary results and the Annual Report will

be a month earlier, i.e. from 31 March to 28 February and from 31 May to 30 April respectively.

5. Tourism companies sector;

6. Trading companies sector;

7. Building materials and constructioncompanies sector;

8. Information Technology companies sector;

9. Financial services companies sector;

10. Fish culture companies sector;

11. Hotels sector; and

12. Other companies sector.

Debt securities:

1. Government; and

2. Public corporations.

Warrants:

� The CSE is the National NumberingAgency for Cyprus. It is a full member ofthe Association of National Numbering


Cyprus

Agencies (ANNA) and is responsible forallocating the ISIN identifier to each listedsecurity.

� Securities issues data are collected on asecurity-by-security basis. This informationis made available to the data vendorsonce the new issues have been approvedby the Council of the CySEC and theCSE.

� As at 31 March 2002, 26% or 58 of the222 securities traded on the CSE weredematerialised. A project to dematerialisethe listed government debt securities iscurrently under study.

� Securities issues outside the country haveso far been limited. In particular, thelargest bank operating in Cyprusproceeded with the issue of shares inGreece, which are listed on the AthensStock Exchange (dual listing). It has alsoissued a subordinated floating rate bondand a convertible bond, which were listedon the Luxembourg Stock Exchange.Moreover, two other banks have issuedsubordinated floating rate bonds, whichare also listed on the Luxembourg StockExchange.


� The first issue of government securitiesin local currency was made in 1969 anddata have been available since then. InApril 1999 an automated online systemwas introduced.

� The first issue of government securitiesin foreign currency was made inNovember 1989 and data have beenavailable since then. Statistics may becompiled on a daily, monthly, quarterlyor yearly basis, depending on theirintended use.

� Data collected on securities listed on theCSE have been available since 1996, whenthe CSE began operations. The frequencyand timeliness of the continuousobligations of the listed companies arepresented in Sub-section 3.2.2.



� As regards issues of governmentsecurities in Cyprus pounds, data areprocessed on an automated online systemand stored in a relational database. Adhoc reports may be extracted as andwhen required.

� The data used for the compilation of thegovernment external debt statistics areend-of-period data, except in the case ofstatistics on ECP issuance, whereaveraging is used for the purposes ofcalculating the average length and interestcost. Such average data are calculated ona volume-weighted basis.

� The reporting schemes of the CySE andCSE provide that data collected aremainly end-of-period.


There is no procedure for the handling ofbreaks since securities data are not collectedfor statistical purposes.

3.3.3 Revisions

No procedure for revisions is currently inplace.


Cyprus

3.4 Publications



Monthly Monetary Survey

� Type of data: sales of Treasury bills andregistered development stocks by auctionproviding data on the date of each issue,the amounts announced, tendered andauctioned, distinguishing betweencompetitive and non-competitive bids,and the interest rates resulted from theauction (average, lowest, highest).

� Frequency of publication: monthly, aboutone month after the reference month.

� Medium of publication: in paper form andon the website (www.centralbank.gov.cy).


Fact Book

� Type of data: new share issues (IPOs):data include the date listed, code, nameof issuer, already issued share capital,capital issued with IPOs, bonus issued,total number of shares, issue price,nominal price and funds raised.

New listed companies on the CSE forthe year under review: data include thesymbol, company name, date listed, initiallisted quantity, IPO price, closing priceon first day, opening price on the listeddate, year-end closing price.

Rights issues: data include the listed date,symbol, name of issuer, transactionperiod, number of rights, exercise priceand funds raised.

New government bond issues (includingTreasury bills): data include the date,code, name of issue, number of bonds

issued, nominal value and funds raised inCyprus pounds.

� Frequency of publication: annually,approximately five months after the endof the reference year.

� Medium of publication: in paper form andon the website (www.cse.com.cy).

Listed Securities with Number of Shares

� Type of data: the stock code, stock name,listing date and total number of sharesare provided for each stock.


� Medium of publication: in excel format onthe website (www.cse.com.cy).

Year Book

� Type of data: general information, balancesheet and profit and loss account, ratioanalysis, charts on the volume, transactions,price and returns of the stocks for eachlisted company.

� Frequency of publication: annually,approximately six months after the endof the reference year.


3.5 Users

The main users for securities issues data arethe Central Bank of Cyprus, the MoF, theCySEC, the members of the CSE, the Houseof Representatives, investors, data vendors,rating agencies, financial analysts, academicsand other researchers.


Cyprus


4.1.1 Definitions

Derivatives utilisation in the domestic foreignexchange market is limited to forward foreignexchange contracts, foreign exchange swapsand currency options. Generally acceptedinternational definitions and conventionsapply.

No official derivatives market exists inCyprus. However, in addition to equity anddebt securities, warrants are also listed onthe CSE. Warrants are certificates issued bya listed company giving the holder the rightto buy ordinary shares at a specific point intime at a specific exercise price.


As financial liberalisation progresses,developments in the financial derivativesmarkets are expected to play an increasinglyimportant role in the formulation ofmonetary policy.

The Central Bank of Cyprus, in the contextof its role as supervisor of banks, collectsdata on financial derivatives. However, as thederivatives activity of banks is purely forhedging purposes and as the market risk inbank operations is minimal, no separatereturn is submitted to the Central Bank ofCyprus. The information provided to theBank with respect to derivatives is part ofcertain other returns, such as off-balance-sheet items, interest rate risk returns andforeign exchange risk returns. Moreover, inthe course of on-site examinations, theexaminers of the Bank review the riskmanagement policies and the procedures ofbanks relating to any financial derivativesactivity undertaken by them.

The Central Bank of Cyprus has recentlyintroduced a foreign exchange market datacollection system to enable it to monitordevelopments in the foreign exchange marketand enforce the regulatory framework of themarket, to assist with foreign exchangeliquidity management and to provide itselfwith early warning signals regarding potentialpressures on the Cyprus pound. Provisionshave been made in the system to collectcertain data related to foreign exchangederivatives from domestic banks. At present,however, the domestic market is active onlyin forward foreign exchange contracts andforeign exchange swaps.

Data on the warrants listed on the CSE arecollected by the CSE and the CySEC and areused mainly for supervisory purposes.


The Central Bank of Cyprus may requirebanks to submit data on financial derivativeson the basis of the following provisions:

(i) Section 63 of the Central Bank of CyprusLaw No. 138(I) of 2002;

(ii) Section 25 (2) of the Banking Law, asamended;

(iii) Section 36 (vi) of the Exchange ControlLaw, Chapter 199 No. 53 of 1972.

The CSE has the power, in accordance withthe CSE Laws and the CSE Regulations, tocollect any data from the listed companies.

The CySEC Laws state that the CySEC mayonly collect data from market participantsfor supervisory purposes. The information isconfidential and may only be used for thepurpose for which it is collected.



Cyprus



The Central Bank of Cyprus collects data onforeign exchange derivatives. The reportingpopulation covers only those domestic bankswhich are authorised foreign exchange dealers.All financial derivatives currently offered bydomestic banks are traded over the counter.

The CySEC and the CSE are responsible forgathering information on the warrants listedon the CSE.


Regarding foreign exchange derivatives, thereporting system and reporting requirementsare identical for all reporting banks. Thefollowing types of data on foreign exchangederivatives are collected by the Central Bankof Cyprus:

� Transactions in forward and foreignexchange swaps and positions in foreignexchange options and futures by currencyfor certain currencies (EUR, USD, GBP,JPY, CHF, CAD and AUD). Data collectionis electronic (secured e-mail transmission).

� For forward and swap transactionsagainst the Cyprus pound, additionalinformation regarding the category ofcounterparty (resident/non-resident) iscollected. For �large-value� transactionswith non-residents against the Cypruspound (i.e. amounts in excess of CYP 0.5million or approximately �0.87 million),the identity of the non-resident is alsorequired. Data collection is electronic(secured e-mail transmission).

Information regarding derivatives may alsobe submitted to the Central Bank of Cyprusas part of other returns, such as off-balance-sheet items, interest rate risk returns andforeign exchange risk returns.

Market and other data regarding the warrantslisted on the CSE can be accessed via theCSE�s own trading system and database.


As far as foreign exchange derivatives areconcerned, the following apply:

� daily data on the overnight open foreignexchange position in futures and optionsfor EUR, USD, GBP, JPY, CHF, CAD andAUD are required. However, no datawere available until March 2002, becausethere had not been any transactions;

� daily data on forward and foreignexchange swaps by currency for certaincurrencies (EUR, USD, GBP, JPY, CHF,CAD and AUD) and in cumulative formfor all other currencies. Additionalinformation regarding the category ofcounterparty (resident/non-resident) iscollected for forward and swaptransactions against the Cyprus pound.For �large-value� transactions with non-residents against the Cyprus pound, theidentity of the non-resident is alsorequired. In March 2002, data inelectronic form were available for around60% of the reporting entities. Thefrequency of the data is daily and mustbe submitted by 12 noon on the followingbusiness day.

Data on warrants have been available since1996, when the CSE began operations, andcan be extracted on a daily, weekly or monthlybasis, depending on their intended use.


4.3.1 Definitions

As regards data on foreign exchangederivatives:


Cyprus

� daily data on the overnight open foreignexchange position in futures and optionsare end-of-day closing balances.

� daily data on forward and foreignexchange swap transactions by currencyfor certain currencies (EUR, USD, GBP,JPY, CHF, CAD and AUD), and incumulative form for all other currencies,are daily amounts traded.

Data on warrants published by the CSE areeither end-of-period data, e.g. marketcapitalisation, or cumulative data for a periodof time, e.g. data on trading activity.


Historical series on foreign exchange marketdata collected by the Central Bank of Cyprusare very brief and incomplete (partial datahave only been available since the beginningof 2002). However, no provisions have beenmade regarding the treatment of breaks inthe series, as this system was not designedas a comprehensive statistical system to serveexternal users (see Sub-section 4.1.2).

4.3.3 Revisions

There are no rules for revisions applicableto foreign exchange derivatives. Once thedata are checked and accepted, they are notrevised, unless a reporting institution submitsrevised data for a particular date with anexplanatory note for the revision. Datacollected by the Central Bank of Cyprus arenot published.

4.4 Publications

As a rule, the Central Bank of Cyprus doesnot disseminate any data relating to foreignexchange derivatives to the public, thegovernment or any other external user.

Statistics on warrants may be found in thefollowing publications of the CSE:

Index Report

� Type of data: lowest, highest and averagetransaction prices, closing buying and sellingprices and number of warrants traded.


� Format of publication: on the website(www.cse.com.cy).

Monthly Bulletin

� Type of data: number and volume ofwarrants traded and market capitalisation.


� Format of publication: electronic (pdf file).

� Medium of publication: distributed via e-mail; also available on the CSE�s website(www.cse.com.cy).

Fact book

� Type of data: trading activity of warrants(value and number of securities traded);particulars for the trading of each listedwarrant (lower, higher, closing price,number and value of securities traded,number of transactions and number oflisted securities); market capitalisation;as well as the warrants schedule givingparticulars for each listed warrant on theexpiry date and exercise price and date.

� Frequency of publication: annually,approximately five months after the endof the reference year.

� Medium of publication: in paper form andalso on the website (www.cse.com.cy).


Cyprus

4.5 Users

The only user of data on foreign exchangederivatives is the Central Bank of Cyprus.

Data on warrants may be used by anyinterested party, including the CSE, theCySEC, members of the CSE, investors, datavendors, financial analysts and others.


5.1.1 Definitions

Up to the end of 2000, interest rates inCyprus were governed by the Interest Lawof 1977, which prescribed a legal ceiling of9% per annum on interest rates. Within thisceiling, the upper limits of bank deposit andlending interest rates were determined, fromtime to time, by the Central Bank of Cyprus.

The Interest Rate Liberalisation Law cameinto force on 1 January 2001 to provide forthe abolition of the interest rate ceiling.Following the interest rate liberalisation, banksadopted a base lending rate as the referencerate on which a margin is added according tothe risk and creditworthiness of the client.As a transitional measure, the base rate ofbanks was set equal to the marginal lendingfacility rate, so that changes in the officialinterest rates by the Central Bank of Cypruscould be passed on to market rates effectively.

Following this development, the Central Bankof Cyprus introduced a scheme for collectingretail bank interest rate statistics fromdomestic banks (formerly deposit moneybanks and other financial institutions)2 whichare under the supervision of the CentralBank of Cyprus. These statistics coverinterest rates that domestic banks apply tolocal currency (Cyprus pound) deposits andloans vis-à-vis their customers, which includefinancial and non-financial enterprises (otherthan banks) and individuals. It should benoted, however, that the sector breakdownused by banks to classify their customers hasnot yet been harmonised with the principlesset out in the ESA 95 and in Regulation ECB/2001/13 concerning the consolidated balancesheet of the MFIs sector. Deposit interest

rate statistics include interest rates oncurrent accounts, deposits redeemable atnotice and deposits with an agreed maturity.In the case of the latter two categories,separate interest rates are collectedaccording to the size and maturity ofdeposits. Lending interest rates are reportedaccording to the purpose and type of thefacility. Interest rates applied by the IBUsare not covered in this section of the Manual,as these institutions are required to limittheir activities mostly to non-residents andin foreign currencies.

The DCD also collects retail interest rateson deposit and lending rates on a monthlybasis from the CCSSs. These societiesconstitute a separate group of creditinstitutions falling under the supervision ofthe DCD. Deposit interest rate statisticsinclude interest rates on sight and currentaccounts, deposits redeemable at notice andwith an agreed maturity. Lending interestrates are reported according to the purposeand maturity of the facility. Decisionsregarding changes in the official interest ratesby the Central Bank of Cyprus are alsocommunicated to the DCD through theMCIT, and subsequently to the CCSSs forimplementation.

5.1.2 The role of MFI interest rate statistics

Policy-makers at the Central Bank of Cyprususe bank interest rate statistics to analysethe transmission mechanism of monetarypolicy. These statistics are an important


2 The other financial institutions sector, which included specialisedbanks and designated financial institutions, merged with thedeposit money banks sector in September 2001 and is henceincluded in the money creating sector.


Cyprus

indicator of how fast and to what degreemarket rates respond to changes in theofficial rates. Moreover, retail interest ratesare used to examine consumption, investmentand saving decisions and can also revealinformation about the demand for credit andthe money creation process in general.

In formulating monetary policy, bank interestrates are also used to calculate the spreadbetween domestic and foreign retail rates inorder to explain capital movements, whilethe spread between retail rates and officialrates is used as a good indicator of the levelof competition in the separate marketsegments. Finally, monetary policy-makersuse bank interest rates to analyse marketconditions of credit.

From the supervisory point of view of theCentral Bank of Cyprus, bank interest ratesalso play a significant role. The purpose ofbanking supervision is to maintain financialstability through bank soundness. Animportant area for bank evaluation is bankprofitability. This involves the analysis ofincome generation and costs, as well as theassessment of the returns achieved.Movements in interest rates have an impacton the interest rate spread, which directlyaffects bank profitability. In this connection,data on bank interest rates is useful forassessing bank profitability and capitaladequacy, as well as for peer group comparisons.

In the course of supervision, the CentralBank of Cyprus supervisors assess whetheran adequate risk management framework isin place that identifies, measures, monitorsand controls the credit risk, interest raterisk, foreign exchange risk and liquidity riskassumed by a bank. With regard to interestrate risk, banks use their own models, suchas gap analysis, and have set their own internallimits with respect to foreign currencies andthe Cyprus pound. These limits are withoutexception extremely conservative and aresubject to review by the Central Bank ofCyprus. Banks are also required to submit tothe Central Bank of Cyprus on a quarterly

basis a gap analysis report for the Cypruspound, which it then reviews and assesses.

The MoF uses bank interest rates to assess theliquidity of lenders and their demand forgovernment paper in relation to thegovernment�s domestic borrowing requirements.Bank interest rates are also used to monitorshort-term economic developments in thecontext of financial analysis regarding privateconsumption, private investment, imports andtherefore changes in the current account ofthe Balance of Payments, inflation, fiscaldeficit and the public sector borrowingrequirement which influences the formulationof economic policy.

The DCD uses interest rate statistics collectedfrom CCSSs to monitor the prudential liquidity,profitability and interest rate managementperformed by the various societies.


The Central Bank of Cyprus is empoweredby the Central Bank of Cyprus Law No.138(I)of 2002 (Central Bank of Cyprus Law) andthe Banking Law No.66(I) of 1997 to collectany information from banks in order to fulfilits functions. In particular, it is authorisedunder Section 63 of the Central Bank ofCyprus Law, to request from banks,government agencies, public corporations andany natural person or legal entity to reportinformation and data in their possessionwhich are necessary to fulfil its objectivesand tasks. Moreover, Section 25 of theBanking Law, as amended, requires banks tosubmit periodically or at its request suchinformation and within such time as may bespecified by the Central Bank of Cyprus.

In the case of CCSSs, the DCD is empoweredby the Co-operative Societies Laws of 1985 to2001 and the Co-operative Societies Rulesof 2000 to collect information on interest rates.


Cyprus



The MFI sector comprises domestic banks,IBUs and CCSSs. For the reasons mentionedin Sub-section 5.1.1, interest rates applied byIBUs are not covered in this sub-section.

As regards domestic banks, information oninterest rates for the entire organisation isprovided by each bank�s head office. This isbecause banking business in Cyprus is highlyconcentrated and, therefore, the head officemakes policy decisions, whereas branchesfollow suit. Nine domestic banks reportinterest rate statistics. The business volumecoverage of reporting banks is around 86%of the balance sheet total for lending ratesand around 65% for deposit rates.

In the case of CCSSs the head offices of all363 institutions report interest rates. The

business volume coverage of reporting CCSSsis 100% of the balance sheet total both forlending and deposit interest rates.


There are two separate reporting schemesfor the collection of interest rate statistics:one covering 9 domestic banks, which reportto the Central Bank of Cyprus, and onecovering the 363 CCSSs (census method),which report to the DCD. In both cases, thedata are collected from the reporting agentsin paper form. In the case of CCSSs electronicreporting is also undertaken.

As far as domestic banks are concerned, dataon both deposit and lending retail interestrates are collected on a monthly basis intable 9.

Table 9Categories of MFI interest rates reported by banks in Cyprus

Deposit interest ratesCurrent accounts Over CYP 1,000Deposits redeemable at notice Seven days

Up to CYP 5,000Over CYP 5,000

Deposits redeemable at notice Three monthsUp to CYP 5,000Over CYP 5,000

Deposits with agreed maturity One yearUp to CYP 5,000Over CYP 5,000

Deposits with agreed maturity Over one year*

Lending interest ratesLending to enterprises:

Overdrafts Within limitIn excess of limit

Secured loansUnsecured loans

Personal loans:Overdrafts Within limit

In excess of limitSecured loansUnsecured loans

Housing loans With life insuranceWithout life insurance

Credit cards

* Separate reporting for each product offered by banks.


Cyprus

In the case of deposit interest rates, domesticbanks are required to report the mostrepresentative rate offered on each type ofdeposit account. Regarding lending rates, theminimum and maximum interest rate charged,as well as a representative rate as defined byeach bank, is reported for each category ofloan. Interest rates are reported as the baselending rate, currently equal to the marginallending facility rate of the Central Bank ofCyprus, plus a margin according to the riskand creditworthiness of the client.

Work towards the implementation ofRegulation ECB/2001/18 concerning statisticson interest rates applied by MFIs to depositsand loans vis-à-vis households and non-financial corporations is planned to commencein the near future.

As far as CCSSs are concerned, data on bothdeposit and lending interest rates are collectedon a monthly basis, as indicated in Table 10.

Table 10Categories of MFIs interest rates reported by co-operative credit and savingssocieties in Cyprus

Deposit interest ratesSight and current accountsNotice accounts seven days

one monththree monthssix monthsone year

Deposits with agreed maturity

Lending interest ratesPersonal loans:

Educational loansLoans for consumptionLoans for investmentLoans for medical treatmentLoans for repayment of existing obligations to third parties

Housing loans:Loans for house purchasesLoans for the purchase of land

Agricultural loansBusiness and professional loansLoans to public and local authorities

For each type of deposit account, a minimumand maximum interest rate is reported, as wellas the corresponding balance at the end of

the month. Lending interest rates are reportedaccording to the purpose and the date ofmaturity of the loan facility. For each categoryof loan facility, a minimum and maximuminterest rate is reported along with the numberof outstanding loans and the correspondingbalance at the end of the month. Data arecollected from all CCSSs and are thenprocessed electronically. Several reports areproduced at a district and national level.


With regard to the domestic banks,information on their interest rates has beenavailable since 1974, when the Central Bankof Cyprus prescribed interest rates forvarious categories of deposits. For lendingrates, a maximum interest rate of 9.0% perannum was in effect. This interest rate regimecontinued until December 2000, wheninterest rates were liberalised.

As from January 2001, a monthly reportingscheme was introduced, described in Sub-


Cyprus

section 5.2.2, providing for the submission ofthe required information within 15 daysfollowing the end of the reference month.

Regarding the CCSSs, annual statistical dataon interest rates have been collected sincethe DCD was established in the late 1950s.The collection of statistical data on a monthlybasis began in 1988. CCSSs are required tosubmit this information by the 15th day ofthe following month.



The basis of calculation varies according tothe nature of the data reported. Most of theinformation provided by both the domesticbanks and the CCSSs are end-of-period data.


So far, only one break in series was recorded,relating to the abolition of the interest rateceiling on 31 December 2000. However, noadjustment was made for this break in series.

5.3.3 Revisions

Up to December 2000, data on domestic bankinterest rates referred only to prescribedinterest rates and, therefore, no revisionswere necessary. Following the introductionof the new reporting scheme in January 2001,revisions to the data are made when deemednecessary, and relevant adjustments are madeand users are notified accordingly.

In the case of CCSSs, when the DCD detectsor is informed of any errors or revisions inthe data, the necessary adjustments are madeand the Central Bank of Cyprus is informedaccordingly.

5.4 Publications


Interest rate statistics for domestic banksare first released for the purposes of themonthly meeting of the MPC, which normallytakes place on the second Thursday of eachmonth. The MPC report is subsequentlypublished by the Central Bank of Cyprus andis available both in paper form and on thewebsite (www.centralbank.gov.cy).

With regard to the type of data disseminated,as no weighted average interest rates arecalculated at present, the average of therepresentative deposit and lending interestrates of the three largest banks is reported.The deposits of these banks represent about70% of all domestic banks� deposits.

Domestic bank interest rates are alsopublished monthly by the InternationalMonetary Fund (IMF) in a publication entitled�International Financial Statistics� (availablein paper form or on CD ROM), whichincludes monthly data on deposits with three-month notice for amounts over CYP 5,000.

The CCSSs interest rates data are notavailable to the public. They are first releasedto the DCD and the Central Bank of Cyprusand then to various other users as describedin Sub-section 5.5 below. As no weightedaverage interest rates are calculated, onlythe minimum and maximum interest ratesfor each category of loan and deposit arecurrently reported.


Retail interest rates data are also publishedannually in paper form by the StatisticalService of the Republic (SSR) in a publicationentitled �Statistical Abstract�.

Summarised data on the retail interest ratesof CCSSs are published in the Annual Reportof the DCD.


Cyprus

5.5 Users

Data relating to retail interest rates collectedby the Central Bank of Cyprus from domesticbanks are mainly used by the MPC, theCentral Bank of Cyprus and the MoF for thepurposes explained in Sub-section 5.1.2.

The Central Bank of Cyprus alsodisseminates information relating to deposit

and lending retail interest rate statistics tothe European Central Bank (ECB), Eurostatand the IMF.

The main users of the CCSSs interest ratesdata collected by the DCD are the MCIT,the MoF, the SSR, the Planning Bureau of theRepublic, the Co-operative Central Bank Ltd,the Co-operative Audit Service and theCentral Bank of Cyprus.


Mrs. Eliana PsimolophitouMoney and Banking Statistics SectionEconomic Research and Statistics DivisionTel.: +357 22 714437Fax: +357 22 378155E-mail:[email protected]

Mrs. Androulla MelifronidouMoney and Banking Statistics SectionEconomic Research and Statistics DivisionTel.: +357 22 714438Fax: +357 22 378155E-mail:[email protected]

6 Contacts at the Central Bank of Cyprus

Ms. Christina NicolaidouMoney and Banking Statistics SectionEconomic Research and Statistics DivisionTel.: +357 22 714429Fax: +357 22 378155E-mail:[email protected]


Cyprus

Czech Republic


Czech Republic


CNB bills Czech National Bank bills

Coll. Collection of laws

CSCe Czech Securities Centre

CSCo Czech Securities Commission

CSO Czech Statistical Office

CZEONIA Czech Overnight Index Average

CZK Czech koruna



EU European Union

� or EUR euro

FEFSI European Federation of Investment Funds and Companies - Fédérationeuropéenne des Fonds et Sociétés d�Investissement




MoF Ministry of Finance of the Czech Republic

OFIs other financial intermediaries

OTC over-the-counter

PRIBID Prague interbank bid rate

PRIBOR Prague interbank offered rate

PSE Prague Stock Exchange


RM System RM-SYSTEM - organiser of off-exchange securities trading

SPAD System Supporting the Market for Shares and Bonds - Systém pro Podporutrhu Akcií a Dluhopisů


Czech Republic

STBS Short-Term Bond System

UNISCR Union of Investment Companies of the Czech Republic - Unie InvestičníchSpolečností České Republiky


Czech Republic

1.1 Legal and institutionalbackground

1.1.1 Introduction

The concept of the financial sector in theCzech Republic corresponds to the EuropeanSystem of Accounts 1995 (ESA 95) and isregulated by the Provision of the CzechStatistical Office of 2 October 1997 on theIntroduction of the Classification ofInstitutional Sectors and Sub-sectors, asamended by the Notification of the CzechStatistical Office of 27 December 2001. The2001 amendment to the nomenclature usedby the Czech Statistical Office (CSO) updated,inter alia, the definitions and breakdown ofthe financial institutions sector, especially inrespect of the corporations included in sub-sectors S122 and S123 of the ESA 95. Itprovided for the explicit inclusion of moneymarket funds in sub-sector S122 and theinclusion of other institutions engaged incollective investment in sub-sector S123.

In the Czech Republic, collective investmentundertakings take the form of investmentcompanies and independent investment funds,both of which are legal entities. Mutual funds,however, do not have legal personality andare considered, from a legal perspective, tobe part of investment companies (as quasi-corporations). Consequently, domesticinvestment companies setting up andmanaging mutual funds and investment fundsare also included in sub-sector S123.

Sub-sector S123 also comprises non-Monetary Financial Institutions (MFI)securities and derivatives dealers (trading fortheir own account). This sub-sector alsoincludes leasing corporations, factoringcorporations, corporations engaged in hire-purchase business (and the granting of non-bank consumer credit), financial holdingcorporations and certain other specialisedfinancial institutions (such as institutionsengaged in the provision of personal orcommercial finance, venture and development

capital companies, etc.). Financial auxiliariesare classified in sub-sector S124, whileinsurance corporations and pension fundsare classified in sub-sector S125.

1.1.2 Definitions

Only some specific types of other financialintermediaries (OFIs) are defined underCzech legislation. The statutory definition ofthese institutions is mostly linked with theaward of licences for their activities and thestipulation of the corresponding prudentialsupervision which certain state bodies (inthis case, primarily the Czech SecuritiesCommission - CSCo) are authorised toperform by law and in accordance with thestatutory regulations of the relevant area offinancial intermediation.

In the Czech Republic, domestic collectiveinvestment undertakings can only be establishedand conduct business pursuant to Act No.248/1992 Coll.1 on Investment Companiesand Investment Funds, as amended. This Actdefines:

� investment funds with legal personalitywhich accumulate funds by issuing shares;

� mutual funds without legal personalityestablished by investment companies asopen-end or closed-end funds (the Actlays down stricter conditions for theexistence of closed-end mutual funds andindependent investment funds); and

� investment companies authorised toaccumulate funds in mutual funds and tomanage the assets of mutual funds andinvestment funds in accordance with theAct and with the statutes of those funds.Each investment company is required toaccount for the stocks and flows of assetsin each mutual fund separately from itsown assets and from the assets of theother funds it manages.


1 Collection of laws.


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The mutual funds and investment fundsactive in the Czech market are broken downby investment policy into:

� equity funds;

� bond funds;

� balanced/mixed funds;

� money market funds; and

� funds of funds.

This breakdown is not regulated by anylegislation. It is based, however, on the fundclassification rules of the Union of InvestmentCompanies of the Czech Republic (UNISCR),which, in turn, is based on the methodologyissued by the European Federation ofInvestment Funds and Companies (FEFSI).This classification is binding on UNISCRmember companies, but it is also used bymost of the other domestic investmentcompanies and funds which are not UNISCRmembers.

Financial institutions trading in securities mayperform their activity, pursuant to Act No.591/1992 Coll. on Securities, as amended,only if they are licensed by the CSCo (i.e. asa securities dealer). Provided they hold alicence with the requisite scope, they mayalso trade in financial derivatives. Securitiesdealers may trade for their own account orfor the account of others - usually clients.They may continue such trading activities onlyvia brokers who have the relevant licencesfrom the CSCo.

Other types of financial intermediaries (withthe exception of insurance corporations andpension funds) are not regulated underspecial legislative acts, so that no furtherdetailed definition of their trading activitiesis given by Czech legislation. In some cases,they are defined using criteria stipulated byprofessional associations (e.g. leasingcorporations). These institutions carry outtheir trading activities pursuant to the lawsgenerally applicable to businesses (in

particular, the Commercial Code No. 513/1991 Coll., as amended, and the TradeLicensing Act No. 455/1991 Coll., asamended).


OFIs play an only marginal role in the CzechNational Bank�s monetary policy, but thecentral bank monitors their activitiesnonetheless. In particular, it monitors thosefinancial institutions engaged in financialintermediation by incurring liabilities in formsother than currency and deposits. These aremostly institutions engaged in long-termfinancing, as defined in Sub-sections 1.1.1 and1.1.2, which to some extent complement ortake the place of MFIs.

The reason for monitoring non-banks in thefinancial sector lies in the fact that centralbank monetary policy naturally affects theirbehaviour, economic activity, profitability,etc. and, conversely, the OFIs can partiallyaffect the behaviour of the MFIs. With regardto monetary policy, the Czech National Bankmonitors especially asset transfers betweenparticular types of entities and financialinstruments. Such transfers can feed backinto interest rates, especially long-term rates.

The main institution currently engaged incollecting and processing statistical data onthe financial institutions in sub-sector S123in the Czech Republic is the CSO. Thestatistical surveys it carries out are aimedprimarily at obtaining the data needed fordrawing up quarterly GDP estimates and forcompiling the annual national accounts. TheCSO also uses the information for compilingand presenting aggregate statistics on theeconomic results of bank and non-bankfinancial institutions.

Data on sub-sector S123 periodicallycollected and processed by other institutions- primarily the CSCo - are used, inter alia,for analysing financial sector trends and forthe purposes of state supervision by therelevant government institutions. In


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aggregated form (and also individually ifprovided for by law), the data on OFIs areused by members of the public for theirinvestment activity, study and researchpurposes, etc.


Pursuant to Act No. 6/1993 Coll. on theCzech National Bank, as amended, the CzechNational Bank is also authorised to requirefinancial institutions other than banks toprovide it with requisite information. Thesepowers were acquired as part of theharmonisation of Czech legislation withEuropean Union (EU) law through anamendment to the aforementioned Act as aresult of the application of Act No. 442/2000Coll.. To enforce these powers, the CzechNational Bank has similar legal recourse as inthe case of banking statistics (see Sub-section2.1.1 of Volume 1 of the MethodologicalManual). The group of financial institutionsfrom which the Czech National Bank maydemand information is defined in the Act onthe Czech National Bank, and correspondsbroadly to sub-sectors S123, S124 and S125of the ESA 95 as well as to the non-bankinstitutions belonging to sub-sector S122.

The CSO is responsible for the collection ofdata for statistical purposes in the CzechRepublic under Act No. 89/1995 Coll. on theState Statistical Service, as amended. TheCSO also collects selected data on the assetsand liabilities of OFIs. The basic content ofthe data collected and the reportingpopulation (broken down by main type ofreporting institution) are set out in CSO DecreeNo. 393/2001 Coll., which spells out theProgramme of Statistical Surveys for 2002.

State supervisory authorities also have thepower to demand the information theyrequire in order to exercise their supervisoryactivities. For the types of OFIs defined bylaw, this authority is the CSCo which carriesout the state supervision of the activities ofinvestment companies and investment funds,as well as of the activities of securities

dealers, using the authorisation it derivesfrom Act No. 15/1998 Coll. on theSecurities Commission, as amended, Act No.248/1992 Coll. on Investment Companies andInvestment Funds, as amended, and Act No.591/1992 Coll. on Securities, as amended.



The Czech National Bank does not currentlycollect any data on assets and liabilities fromOFIs. For monitoring and analysis in themonetary statistics area, it uses publiclyavailable statistical data only.

For balance of payments needs, the CzechNational Bank has introduced the collectionfrom selected non-bank securities dealers ofdata on holdings, trades and income relatingto the securities they manage for theirclients.

The preparation by the Czech National Bankof data collection for OFI statistics inaccordance with European Central Bank(ECB) methodology (which will be usedsystematically for money and bankingstatistics purposes by the Czech NationalBank and potentially also for the reportingrequired by the ECB) is planned for 2004.

The principal statistical data on OFIs in theCzech Republic are collected and processedby the CSO. The data are set out in theProgramme of Statistical Surveys for therelevant year. On the basis of thisprogramme, the CSO collects statistical datain a uniform manner from OFIs (S123) andfinancial auxiliaries (S124), in particular:

� investment companies and their mutualfunds;

� independent investment funds;

� financial leasing corporations andcorporations engaged in hire-purchasebusiness;


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� financial corporations engaged infactoring and other lending; and

� financial holding corporations and otherspecialised financial intermediaries.

At the CSO, data are collected from thetypes of institution stipulated, using thecomplete survey method. However,investment companies only submit aggregatedata for themselves and their mutual funds.

The importance of each category of OFIs interms of the total assets of sub-sector S123can be determined only approximately fromthe information collected by the CSO andonly in the principal financial institutioncategories for which aggregated data areprocessed by the CSO. The main types ofOFIs in sub-sector S123 (ranked by assetsize) are roughly as follows:

� investment companies and investmentfunds - 46%;

� financial leasing corporations andcorporations engaged in hire purchase -40%;

� financial corporations engaged infactoring, lending and other financialservices - 14%.

The CSCo collects data only from investmentcompanies (including data for each mutualfund that they set up and manage), investmentfunds and securities dealers. These financialintermediaries periodically send informationabout their finances to the CSCo, to theextent and on the dates stipulated by thelaws mentioned in Sub-section 1.1.4 in thecontext of the CSCo�s powers to collectdata. This is information which financialintermediaries are required to disclose underthese laws in order to inform the publicabout their financial management and financialcondition, and which is also used by theCSCo for state supervision.


From the aforementioned financialinstitutions, the CSO collects two aggregatestatistical statements (standardised for alltypes of institution), namely:

� a quarterly statement from non-bankingfinancial institutions; and

� an annual statement from non-bankingfinancial institutions.

These consist mainly of information takenfrom corporate financial accounting and basicfinancial statements, i.e. profit and lossaccounts and balance sheets. The basis ofboth statistical statements is information onthe assets, liabilities, expenses and income(including profits) of the reporting agents. Inaddition, they contain other statistical data,e.g. on workforces and fixed-asset structure.Assets and liabilities are reported as thestocks on the last calendar day of the periodunder review. In addition to the asset items,the annual statement includes flow data onselected financial assets, broken down inaccordance with the ESA 95 (additions anddecreases resulting from transactions,valuation changes including exchange ratedifferences, and other adjustments).

The quarterly statement contains only basicinformation on the main types of assets andliabilities, usually without a more detailedbreakdown (only liabilities are broken downinto short-term and long-term) - around 20selected items in total. In the annualstatement, assets and liabilities are brokendown in greater detail into various itemsbased on the Chart of Accounts applicableto OFIs. In some cases, however, thebreakdown by item does not coincide withthe breakdown by real economic instrument.Some financial assets and liabilities are brokendown in greater detail by specific instrumentsonly. Other breakdowns by basic items (bycounterparty and maturity) are usedexceptionally and unsystematically.


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The items specifically mentioned in thesestatements are listed below.

On the assets side (gross and net value):

� fixed assets;

� financial investments (primarily insecurities and equity holdings);

� cash; and

� other short-term financial assets(primarily securities for trading anddeposits in banks).

On the liabilities side (broken down by maininstrument and partly also by maturity):

� capital and provisions;

� long-term and short-term liabilities(securities issued, other non-bankliabilities); and

� bank loans received.

The CSO collects the data from the reportingagents electronically, and the statements aresubmitted simultaneously in hard copy.

As mentioned above, the CSCo also collectsdata from several types of OFIs. Twice ayear, in compliance with the obligations toprovide information laid down in theInvestment Companies and Investment FundsAct, investment companies and investmentfunds provide the CSCo with basic financialstatements that comply with domesticaccounting standards, namely:

� a balance sheet; and

� a profit and loss account.

These statements form part of the annualand biannual financial reports of theinvestment companies and the funds theymanage. The reports also include a cash flowstatement.

Once a year, in compliance with theobligations to provide information laid downin the Act on Securities, securities dealersalso provide the CSCo with a balance sheetand a profit and loss account. Thesestatements are compiled using the structureand methodology stipulated in the Ministryof Finance Provision of 7 December 2001stipulating the Arrangement and Content ofthe Financial Statement Items and the Scopeof Information to be Disclosed for Banksand Certain Financial Institutions. Investmentcompanies and investment funds submit theirdata to the CSCo on diskette, whereassecurities dealers submit their statementspredominantly in hard copy and, in somecases (around 15%), on diskette.

The information on OFI assets and liabilitiesin the statistical and financial statements aredefined and compiled in close relation to theaccounting standards. For all legal entitiesand other accounting entities (and thus alsofor OFIs), these standards are laid down inAct No. 563/1991 Coll., on Accounting, asamended, and in related Ministry of Finance(MoF) regulations. For each type ofaccounting entity, MoF provisions stipulate achart of accounts and define the financialstatements and items which form them(balance sheet, profit and loss account, cashflow statement). The Accounting Act and theassociated regulations have been harmonised,with effect from 1 January 2002, with theInternational Accounting Standards (IAS) andwith the relevant EU directives.

Up to the end of 2001, all OFI sub-sectorinstitutions kept their books in accordancewith the Chart of Accounts for Businessmen(created primarily for normal manufacturingand trading companies). As from 2002,selected types of OFIs now keep their booksin accordance with the Chart of Accountsfor Banks. This will allow activities in thearea of financial intermediation to berecorded in a more satisfactory manner. Inaddition to banks, the following entities nowkeep their books in accordance with theChart of Accounts for Banks and CertainFinancial Institutions:


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� investment companies, investment fundsand mutual funds;

� securities dealers;

� credit unions (savings and loan co-operatives); and

� pension funds.


The information collected from OFIs by theCSO has evolved together with the financialsector in the Czech Republic since 1989.Institutions engaged in collective investment,securities trading and other modern financialservices were established in the CzechRepublic in the first half of the 1990s. Thestatistics on the OFIs and financial auxiliariessub-sector were established at the same timeand have evolved concurrently. Initially, thesestatistics consisted solely of investmentcompanies and investment fund statistics, butthey have gradually been expanded to includeother types of OFIs.

Reporting agents submit statements for theOFIs statistics collected by the CSOaccording to the following schedule:

� quarterly statements by the 27th calendarday following the end of the quarterunder review, and December statementsby 31 January of the following year; and

� annual statements by 30 April of thefollowing year (or, in the case ofcompanies who have their financialstatements audited, by 30 June).

Reporting by investment companies,investment funds and securities dealers tocapital market supervisors has evolved in asimilar way to the OFI statistics. Initially, statesupervision was exercised by the MoF, butthe CSCo took over this role - along withthe duty of being one of the locations forthe collection and mandatory disclosure of

information on collective investmentundertakings and securities dealers - when itwas established in 1998.

Investment companies and investment fundssubmit the statements referred to in Sub-section 1.2.2 to the CSCo:

� within one month of the end of the half-year, i.e. by 31 July; and

� within three months of the end of thecalendar year, i.e. by 31 March of thefollowing year.

Similarly, securities dealers submit thesestatements to the CSCo within three monthsof the end of the calendar year, i.e. by 31March of the following year.



The institutions that collect and processinformation on OFIs work solely with currentdata. In the event of breaks in series (owingto changes in the reporting population orchanges in methodology), no revisions aremade to the data submitted or to theprocessed outputs.

1.3.2 Revisions

The CSO carries out internal checks of theconsistency of the information contained inthe statements sent by each reporting agent.These checks, including requests fornecessary revisions, are done during theprocessing of the data prior to publication.

The CSCo receives and archives thestatements sent by investment companies,investment funds and other stipulatedfinancial intermediaries, without conductingregular detailed checks of the internalconsistency of the data contained in thestatements.


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1.4 Publications

The CSO periodically disseminates processeddata based on the quarterly and annualstatements referred to in Sub-section 1.2.2in the following publications:

� Economic Results of Financial Institutions(Banking and Non-Banking) - CSOpublication code 9401, quarterly,published in the last month of thefollowing quarter; until 2001 it took theform of a printed publication, but since2002 it has only been available inelectronic form (diskette);

� Economic Results of Financial Institutions(Banking and Non-Banking) - CSOpublication code 9403 (previously Resultof the Annual Survey of FinancialInstitutions), annually, publication in hardcopy in December following the year ofreference;

Aggregated data on OFIs are also publishedin the Annual National Accounts of theCzech Republic - CSO publication code: 5004

- and in the Statistical Yearbook of the CzechRepublic issued by the CSO.

A procedure for sending informationcollected by the CSCo to the CzechSecurities Centre (CSCe) is currently underpreparation. A database containing informationon investment companies, investment fundsand securities dealers will be set up at theCSCe. This information will be available forconsultation on the CSCe�s website(www.scp.cz).

1.5 Users

With the exception of the specific informationon investment companies, investment fundsand securities dealers, which is available tothe public (investors), other individual datacollected from OFIs are intended only forthe internal use of the CSO and the CSCo.The aggregated data obtained by processingindividual data are used mainly by governmentinstitutions, the Czech National Bank,financial institutions and other professionalsin the financial sector.


2.1.1 Definitions

Both components of the debt instrumentmarket - the money market and the capitalmarket - are well developed in the CzechRepublic. The most significant part of themoney market as regards the transactionvolume is the non-collateralised interbankdeposit market, which is also the most liquidsegment of the financial market. The standardmaturity terms on interbank deposittransactions are as follows: overnight, oneand two weeks, one, two, three, six and ninemonths, and one year. Total daily transactionturnovers fluctuate around CZK 30 billion(�1 billion). Transactions of up to two weeksaccount for around 90% of this total, whileovernight deposits account for more than


half (almost two-thirds). The reference ratesfor this market are the PRIBID (Pragueinterbank bid rate), the PRIBOR (Pragueinterbank offer rate) and, since January 2002,the CZEONIA (Czech Overnight IndexAverage). The PRIBID and PRIBOR interestrates for the purchase and sale of interbankdeposits are set daily at 11.00 a.m. local timeusing quotations provided by referencebanks. The CZEONIA is set daily by theCzech National Bank using information onaverage overnight interest rates and thevolumes of deposit transactions concludedby the reference banks. The discount andlombard rates, set by the Czech NationalBank, provide the floor and ceilingrespectively for movements in short-timeinterest rates. The discount rate is the rateapplicable to the deposit facility and thelombard rate is the rate applicable to the


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marginal overnight lending facility. Thesestanding facilities are used for fine-tuning theliquidity of individual commercial banks.

Another important part of the money marketis the market for bonds with a maturity ofup to one year. In particular Treasury bills,which the MoF issues for short-termfinancing needs, and Czech National Bankbills (CNB bills), which the Czech NationalBank issues for executing its monetary policyoperations. These bonds are traded off theorganised market, with registration andsettlement taking place within theShort-Term Bond System (STBS) at theCzech National Bank (see Section 3). In 2001,short-term bonds totalling CZK 1,433 billion(around �40 billion) were registered in theSTBS; of these, two-thirds were CNB billsand the remainder predominantly Treasurybills. The value of the transactions on thesecondary short-term bond market is aroundCZK 70 billion (around �2 billion) daily.

Another well-developed market is theinterest-rate derivatives market, whichconsists primarily of trading in interest rateswaps and forward rate agreements. Theunderlying reference rate for thesetransactions is the PRIBOR.

The money market also comprisesrepurchase agreement (repo) operations.Treasury bills and CNB bills are usually usedas the collateral, but other debt securities(in particular government bonds) are alsoused. Repos are often used by non-bankinvestors as an alternative to short-term bankdeposits which are subject to the reserverequirement. The Czech National Bankparticipates actively on the market byexecuting repo tenders which it uses as oneof its main monetary policy instruments towithdraw excess liquidity. The basic maturityof these transactions is 14 days and theCzech National Bank announces a maximumlimit repo rate at which bank bids can besatisfied in the repo tender.

The debt-instrument capital market hoststrading in coupon and discount bonds withmaturities of more than one year. In theCzech Republic, most of these bonds (90%)are issued in dematerialised (non-paper) formand are registered at the CSCe (see Section3). There are two organised markets: thePrague Stock Exchange (PSE) and the RMSystem. The latter, however, is almostinsignificant in terms of the volume of bondtransactions (accounting for only around 0.5%of the total).

The PSE was established in 1992 and operateson a membership principal, meaning thattrades may only be executed via PSEmembers (and those members may only tradeon the exchange). The PSE permits threetypes of trading: trading involving marketmakers - the System Supporting the Marketfor Shares and Bonds (SPAD), automatedtrading (auction and continual trading) andblock trading registered at the stockexchange. Most bond trading (almost 100%)is transacted in the form of block trades, i.e.trades which are in fact executed outsidethe market system (over-the-counter -OTC), although PSE members subsequentlyregister them in the system. This means, interalia, that a negligible amount of trading takesplace through the PSE�s central market wherebond prices are established in accordancewith a price list; the information value ofthese prices is therefore minimal. For thisreason, the PSE has started publishing averagereference prices based on the bid and offerquotations of market makers (PSE membersand non-members). These reference pricesreflect the market prices of the bonds. Forsettlement of the trades executed on theexchange, the PSE has established a subsidiarycalled Univyc which, in addition to settlingtrades between PSE members, offerssettlement of OTC transactions between itsown members.

Bond trading in the Czech Republic also takesplace completely off the organised marketsvia direct transfers at the CSCe. The PSE isendeavouring to restrict such transfers and


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to shift most trading to the organised markets.

The MoF plays an important role in the bondmarket as the issuer of government bonds.In terms of volume, government bond tradingaccounts for around 50% of all bond tradingon the PSE. The Czech National Bankparticipates in the capital market only as theMoF�s agent for primary issues of governmentbonds.

The Czech equity market is closely linked tothe process of economic transformation. In1995, there was a sharp increase in thenumber of issues registered on the exchangeowing to the second wave of voucherprivatisation. However, this led toconsiderable market fragmentation and pricevolatility. Moreover, many issues attractedlittle investor interest or were not traded atall. The PSE thus reduced the number ofissues traded on its markets. At present,around 100 share issues and mutual fundunits are registered on the exchange. Allthree trading types mentioned above areexecuted in shares and units on the PSE, butunlike bonds, most of the transactions areconcluded in the exchange system (meaningthat the share price information on theexchange is more reliable). The most liquidshares are traded in SPAD. This system isbased on the activities of market makerswho quote prices for each issue in SPAD.Smaller volumes of these issues can also betraded in the automated trading system. In2001, SPAD included seven share issues.Other shares and units are only traded inthe automated trading system and all issuesregistered at the PSE can be traded as blocktrades.

The main capital market indices published bythe PSE are the PX-50, PX-D, PX-GLOB and19 branch indices (on the PSE�s officialwebsite, branch indices are referred to assector indices, which is inconsistent with theterminology used in the ESA 95). The PX-50is a price index based on InternationalFinance Corporation methodology and iscalculated on a variable base of the mostliquid shares (maximum 50). The PX-D was

launched mainly as the future underlyingasset for derivatives trading. Its calculationbase consists solely of non-fund stocks tradedin SPAD. In 2001, the proportion of suchbase issues in pricing trades was greater than95%. The PX-GLOB base comprises all shareissues, including investment fund stocks andunits, for which closing prices were set nolater than in the preceding session. Thebranch indices are established in accordancewith the exchange branch classification.

The main RM System capital market index isthe PK-30, which has been published since1994. It reflects the prices of the 30 mainissues traded on the RM System market.

The CSCo (see Section 3) exercises the roleof the capital market regulator.

The foreign exchange market is one of thefastest developing areas of the financialmarket, especially with regard to instrumentstraded. According to the applicablelegislation, the term �foreign exchangeassets� means foreign currency funds in cashor on accounts, foreign securities, gold, andfinancial derivatives derived from such assets.Spot, forward, option and swap transactionsare all executed on the Czech foreignexchange market. There is no institutionalderivatives market in the Czech Republic, sothat trading takes place off the organisedmarket (OTC); alternatively, Czech financialinstitutions can use offshore markets.

The most important participants in the Czechforeign exchange market in terms of dailyturnover are foreign financial institutionswhich use the market primarily forspeculative reasons. Since the introductionof managed floating in 1997, the CzechNational Bank has participated in the marketonly in exceptional cases in order to curbexcessive exchange rate fluctuations. TheCzech National Bank�s role on the foreignexchange market is gradually switching tothat of a regulator.


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State administration in the area of foreignexchange trading is exercised by the MoFand the Czech National Bank pursuant toAct No. 219/1995 Coll., the ForeignExchange Act, as amended. The MoFexercises its responsibilities pursuant to thisAct in respect of the organisational bodies ofthe state, regional and local authorities andstate funds, and all persons in the area ofcredits granted or accepted by the CzechRepublic. The Czech National Bank exercisesits responsibilities pursuant to this Act inrespect of other residents and non-residents.The Czech National Bank grants non-bankforeign exchange entities licences to trade inforeign exchange assets or to provide moneyservices. Banks are subject to regulation bythe Czech National Bank pursuant to theAct on Banks. Under this Act, the CzechNational Bank issues banking licences which,in many cases, contain an authorisation totrade in foreign exchange assets, andsupervises the banks� activities (includingforeign exchange trading). The CzechNational Bank keeps a list of foreignexchange entities and of the foreign exchangelicences granted to them. A foreign exchangelicence is not required for trading in foreignsecurities.

The commodities market is not significantlydeveloped in the Czech Republic and theCzech National Bank has not established anymonitoring mechanism.


The financial market statistics used by theCzech National Bank for monetary analysesand for implementing monetary policyencompass the money market, the foreignexchange market, the bond market and theequity market. The central bank does notmonitor the commodities market (except forthe following offshore markets: oil, naturalgas and food). From the monetary policyperspective, for the Czech National Bankthe most important markets are the moneymarket and the foreign exchange market on

account of the liquidity of these segmentsand, in particular, of their significance toconducting monetary policy. The central bankoperates mainly on the money market.


The Czech National Bank has no speciallegislative powers to collect statistics onfinancial markets. Under the Czech NationalBank Act, the Czech National Bank maycollect information on instruments andactivities in financial markets only from banksand other financial institutions, and fromentities that have information needed for thecompilation of the balance of payments (seeSection 3). Pursuant to the Foreign ExchangeAct, the Czech National Bank may alsodemand information relating to payables andreceivables arising from foreign exchangetrading and associated financial flows. Itobtains information from some marketsegments by dint of its statutory powers overthose markets and its authorisation tomaintain the short-term bond register (withinthe STBS).

The main information obtained - orgenerated and processed - by the CzechNational Bank in the money market area isreference interest rates. These it regulatesin the following official information notices:Rules for Reference Banks and theCalculation (Setting) of Reference InterestRates (PRIBID and PRIBOR) (No. 5/2000)and Rules for the Calculation of CZEONIAReference Interest Rates (No. 17/2001).

The Czech National Bank does not usuallycollect information on the capital marketdirectly, but obtains certain informationunder contract from the PSE, the RM System,the CSCe and the CSCo.

The PSE operates in the Czech Republicpursuant to Act No. 214/1992 Coll. on theStock Exchange, as amended. The exchangecollects and discloses information on alltrading types in accordance with its internal


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regulations (Rules of the PSE issued inaccordance with the Act on the StockExchange). The RM System was establishedas an OTC market pursuant to Act No. 591/1992 Coll. on Securities, as amended. Itsbasic regulations, in which the conditions fordata collection and their publication are alsospecified, are the Trading Rules approved bythe CSCo.

The CSCe was founded in 1993 pursuant toAct No. 591/1992 Coll. on Securities, asamended, and is responsible under this Actfor maintaining a global register ofdematerialised securities (see Section 3). TheCSCo was set up as the administrativeauthority for the capital market area in 1998pursuant to Act No. 15/1998 Coll. on theSecurities Commission, as amended. Underthis Act, in addition to InternationalSecurities Identification Number (ISIN)information, it collects information on alltrading in investment instruments (seeSection 3). The duty to report all tradesexecuted off the public market is laid downin Ministry of Finance Provision No. 105/2000 Coll. on the Reporting of Trades inInvestment Instruments Executed off thePublic Market.



In the money market area, the CzechNational Bank collects data relating to thesetting of reference interest rates. ThePRIBID, PRIBOR and CZEONIA are set usingquotations and trading reports provided bythe reference banks. The reference banksconsist solely of major banks whichparticipate actively in the interbank depositmarket and which meet the conditions laiddown by the Czech National Bank. The listof reference banks whose quotations areused to set rates is subject to change.

The Czech National Bank also collectsinformation on securities issues (see Section3) and derivatives (Section 4) as well as, for

balance of payments purposes, data ondomestic securities held by non-residents andon foreign securities held by residents.

In addition to the CSCo and the CSCe, themain institutions gathering and processinginformation on capital markets in the CzechRepublic are the PSE and the RM Systemwhich set capital market indices usinginformation on trading between theirmembers/clients. The Czech National Bankobtains the information it needs for itsactivities from these institutions and fromstandard information agencies involved in thefinancial markets (e.g. Reuters andBloomberg).

On the basis of agreements with the banks,the Czech National Bank conducts a biannualsurvey of turnover on the foreign exchangemarket. This involves contacting around 15of the major banks accounting for around95% of the entire market during the periodunder review.

To set the exchange rate, the Czech NationalBank takes information from standardinformation agencies (Bloomberg andReuters).

The CSO conducts no regular specificstatistical surveys of the financial markets inthe Czech Republic.


The Czech National Bank, in co-operationwith The Financial Markets Association ofthe Czech Republic, has delegated the setting(calculation) of the PRIBID and PRIBORreference rates to the Czech Forex Club inthe role of calculation agent. The referencebanks provide the calculation agent with dailyquotations of their bid and offer prices forinterbank deposits. At 11.00 a.m. local time,the agent determines and disseminates thedaily rate. Reference bank status can only begained by major interbank marketparticipants who meet the conditions laiddown in the rules and to whom the Czech


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Forex Club has granted such status at theirrequest (with the consent of the CzechNational Bank).

The CZEONIA reference rate is calculatedand published by the Czech National Bankusing information supplied by reference banks(i.e. banks with reference bank status for thePRIBID and PRIBOR). The reference banksare required to inform the Czech NationalBank of the total volume of their overnightdeposit transactions and their averageinterest rate (the average weighted byvolume) every working day within 15 minutesafter the end of the clearing day at the CzechNational Bank�s Clearing Centre.

The Czech National Bank obtains informationon the capital market situation indirectlyfrom other institutions, in particular:

� the PSE - which, every day, provides theCzech National Bank with its price listfiles containing information on exchangeindices and on total trading volumesexecuted on its markets and registeredat the exchange, and detailed security-by-security information. Since thebeginning of 2002, for the purposes offurther processing, the Czech NationalBank has been maintaining a database ofinformation on bond trading (ISIN,security names, closing prices, numberof securities traded, trading volume,number of transactions, reference prices,etc.). In addition to information from theprice list, the PSE�s website (www.pse.cz)gives monthly and annual aggregated data;

� the RM System - which, on its website(www.rmsystem.cz), publishes quarterlyaggregated information on trading;

� the CSCe - which provides the CzechNational Bank with monthly aggregatedata on securities transfers in its registerat the PSE, the RM System and OTC,broken down into shares, units andbonds (with government bonds recordedseparately). It also supplies a monthlysurvey of owners of more than 10% of

an issue, and of the 50 securitiesrecording the greatest volume/number oftransfers in the given month;

� the CSCo - which, on request, providesthe Czech National Bank withinformation on new securities issuesregistered for trading on public markets(security-by-security).

The Czech National Bank sets foreignexchange market rates based on the currentsituation on the interbank foreign exchangemarket. The Czech National Bank takesexchange rate and forward point quotationsfrom the market using information agencies.Forward figures against the euro and the USdollar correspond to how each currency, orits forward points, is trading on the foreignexchange market at 11.00 a.m. local time.

The Czech National Bank conducts a surveyof turnover on the foreign exchange marketin the context of foreign exchange regulationand trading. In the survey, the major banksreport their trading volumes during thecourse of one week, broken down by type(spot, forward, swap and optiontransactions), currency and counterparty.


The Czech National Bank has been obtainingthe money market operating information itneeds to calculate and monitor referencerates daily since 1992, in the case of thePRIBID and PRIBOR rates, and since thebeginning of 2002, in the case of theCZEONIA rate.

Information on the capital market is availableat the institutions responsible for itscollection, primarily dating back to when theywere established. The PSE has beencalculating the PX-50 since 1994 (calculatedback to 1993), the PX-D since 1999(calculated back to 1997), and the PX-GLOBand branch indices since 1994. The indicesare calculated continually during the open


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phase under SPAD, i.e. from 9.30 a.m. to 4.00p.m. in 5-minute intervals. The RM System�sPK-30 index is available from 1994. The CSCeand the CSCo have been collecting informationsince they were created. The Czech NationalBank has figures on monthly trading volumes,average indices and certain other PSE and RMSystem indicators dating back to 1996.

Other information on financial markets issubmitted by banks to the Czech NationalBank with the frequency and timelinessindicated in Sections 3 and 4.

The Czech National Bank sets the exchangerate daily at 2.15 p.m., with effect on thesame day. A daily history and the monthlyand annual averages are available from 1991in the case of exchange rate setting, andfrom 1996 in the case of forward exchangerate setting. Aggregate information on foreignexchange market turnovers has beencollected since 1995, usually biannually.



The PRIBID and PRIBOR reference rates arecalculated as the simple arithmetic averageof the reference banks� quotations roundedto two decimal places. Where a sufficientlylarge number of banks provide quotations(i.e. more than six), the highest and lowestquoted rates are eliminated prior to thecalculation. No fixing is performed if thecalculation agent receives less than fourquotations on the given day.

The CZEONIA reference rate is calculatedas the weighted arithmetic average of theinterest rates on all non-collateralised overnightdeposits placed by the reference banks onthe interbank market.

The BCPP2 price indices (PX-50, PX-D, PX-GLOB and branch indices) are determinedby the following formula:

where:

I(t) is the value of the index at time t;

M(t) is the market capitalisation of the baseat time t,;

M(0) is the market capitalisation of the basein the basic (starting) period; and

K(t) is a chaining factor, which takes intoconsideration changes in the index base.

The Czech National Bank sets exchange ratesas the average between the bid and offerprices on the interbank foreign exchangemarket. The forward rate is derived by dividingthe forward points by 1,000 and adding theresult to the spot rate. The information onforeign exchange market turnover consistsof daily averages calculated from the one-week trading reports obtained from the mostimportant banks.


The institutions gathering information on thefinancial markets usually only work withcurrent data. In the event of a change in thereporting population or a change in calculationmethod, an explanatory note is usually addedto the break in series.

2.3.3 Revisions

Each of the institutions collecting data on thefinancial markets has its own internal rulesfor checking the information and for themethods and options to be used for theirrevision.

I(t) = K(t) x x 1000M(t)M(0)

2 BCPP is part of the official name of the price index and standsfor the PSE.


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2.4 Publications


The PRIBID, PRIBOR and CZEONIA, alongwith the quotations of each reference bank,are announced as soon as the rates havebeen set and all are available through theusual information systems (e.g. Telerate,Bloomberg and Reuters). The Czech NationalBank posts the PRIBOR and CZEONIA ratesfor each day (at approximately 1.00 p.m. localtime), as well as the corresponding annualhistorical data, on its website (www.cnb.cz).

Other foreign exchange market informationis also available on the Czech National Bank�swebsite, including exchange rate and forwardrate fixings (both current and historical),foreign exchange market turnover, and ahistory of its own foreign exchange trading.It releases the daily exchange rate fixing ataround 2.30 p.m. local time and the forwardrates at around 1.00 p.m. local time.


In addition to information available throughstandard information agencies, severalinstitutions publish their own aggregate dataon the financial markets. The PSE publishesmonthly and annual trading statistics on itswebsite (www.pse.cz). On its website, theRM System publishes quarterly aggregatetrading statistics (www.rmsystem.cz).

2.5 Users

Financial market data are used by a broadspectrum of market participants. The CzechNational Bank uses the information primarilyfor its monetary policy decisions and analyses.Several government institutions, as well asprofessionals in the finance sector, also usethese statistics for analytical purposes.



3.1.1 Definitions

In the Czech Republic, pursuant to Act No.591/1992 Coll. on Securities, as amended,�securities� means shares, interimcertificates, share vouchers, mutual fundunits, bonds, investment vouchers, papercoupons, bills of exchange, cheques,consignment notes, warehouse receipts,stock specifications, warrants, and any otherpaper recognised as securities under speciallegislative acts. Debt securities can be brokendown into government, municipal, corporateand mortgage bonds. Securities can generallybe issued in certificate (paper), dematerialised(non-paper) or immobilised form. Bankshares with voting rights attached may onlybe dematerialised. Other shares, sharevouchers, units, bonds, coupons, investmentvouchers and warrants may also bedematerialised.

The Czech National Bank�s securitiesstatistics form part of the monetary andbanking statistics, which focus on thecollection of data from banks and - in thenear future - from certain other MFIs. Aspart of the system of statements submittedby banks, the Czech National Bank alsoobtains information on the volumes ofsecurities that they issue. The aim is to obtainan overview of the structure (in terms oftype, currency, maturity, holder, etc.) of thesecurities issued by banks as a more detailedbreakdown of bank balance sheets. Bankssubmit the information in the breakdownrequired and on the dates stipulated by theCzech National Bank. Period-end stocks onsecurities issues accounts - but not security-by-security information - are available.

Another source of securities statistics is theregister, held by the Czech National Bank, ofdematerialised bonds of maturities of up toone year issued in the Czech Republic. These


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bonds are registered in the STBS, which wasestablished in its basic form in 1992 andsubsequently expanded considerably to itscurrent level of functionality in 1995.

Other institutions involved in collectinginformation on securities include the CSCe,set up to promote the development of thecapital market, which is responsible formaintaining a statutory register of dematerialisedsecurities. This includes a register of issuersand the securities issued by them, as well assecurities owner accounts. The CSCe isunder contract to provide the CzechNational Bank with monthly aggregate dataon trading volumes and on those ownerswho hold more than 10% of an issue.

An important institution in the field of capitalmarket regulation is the CSCo, which wasestablished in 1998 as an independentadministrative authority for the capitalmarket area. The CSCo exercises statesupervision of investment companies,investment and mutual funds, securitiesdealers, brokers, registered intermediaries,public markets (PSE and RM System), thesecurities register (CSCe) and, to a limitedextent, pension funds. It approvesprospectuses for marketable securities andallocates ISINs. The CSCo provides theCzech National Bank with quarterlyinformation on securities newly registeredfor trading on the public market (security-by-security).


The Czech National Bank monitors newlyissued securities (debt and non-debt) in theCzech Republic; the reasons for this aresimilar to those which apply to OFI statistics.Securities represent an alternative totraditional bank loans, so that it is importantfor the central bank to monitor such issueswith respect to their volume and interestrates. Non-debt financing in the form ofprimary offerings is practically non-existentin the Czech Republic, with the exception ofcapital increases in some businesses (e.g.

banks). In addition to domestic securities,the Czech National Bank monitors thevolume of Czech koruna-denominatedeurobonds for possible implications for theCzech koruna exchange rate.


The key legislation setting out the powers ofthe Czech National Bank and the duties ofbanks in the field of data collection is ActNo. 6/1993 Coll., on the Czech NationalBank, as amended, and Act No. 21/1992 Coll.,on Banks, as amended (see Part 1 of theMethodological Manual). Pursuant to theseActs, the Czech National Bank is authorisedto require banks, foreign bank branches andother financial institutions, as well as entitiesthat have information needed for thecompilation of the Czech Republic�s balanceof payments, to provide it with theinformation and documents it needs toperform its duties. This authorisation alsoapplies to information on securities issues.The scope and manner of the statutorycollection of data in the field of securitiesissues statistics are the same as those forinterest rates statistics and OFI statistics (seeSub-sections 5.1.3 and 1.1.4). The CzechNational Bank is not authorised to demandinformation from other issuers and would becompelled to use other sources to obtainsuch information.

Under the Czech National Bank Act and theSecurities Act, the Czech National Bank isresponsible for maintaining a register of theshort-term securities issued by theGovernment of the Czech Republic and theCzech National Bank, and of other short-term bonds issued in dematerialised form(see below). The rules for maintaining thisregister and for settling trades within theSTBS were set out by the Czech NationalBank in its Official Information of 11/1995on the Issuing of the Rules of the Short-Term Bond System, as amended. Under thisregulation, the following are registered inthe STBS:


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� Treasury bills and other governmentbonds with maturities of up to one year;

� CNB bills with maturities of up to sixmonths;

� bonds of other banks and non-banks withmaturities of up to one year denominatedin Czech koruna, whose issuance hasbeen authorised by the CSCo.

A Registration Centre has been set up at theCzech National Bank for maintaining thestatutory register within the STBS. ThisCentre keeps a �Register of Issuers�, a�Register of Issues� and other STBS-relatedinformation.

In this system, the Czech National Bank doesnot act as a market organiser (trades takeplace OTC), but fulfils the role of a point ofregistration of securities and their owners,as well as that of the agent of the MoF forthe sale of new issues of government bonds,and of a client for trading in its own nameand on behalf of the MoF.

The legislation setting out the powers ofother institutions for maintaining andprocessing information on securities issuescomprises Act No. 591/1992 Coll. onSecurities, as amended, Act No. 530/1990Coll. on Bonds, as amended, Act No. 513/1991 Coll., the Commercial Code, asamended, and Act No. 15/1998 Coll. on theSecurities Commission, as amended. Theselaws stipulate that:

� the CSCe is required to keep a registerof dematerialised and immobilisedsecurities to the extent provided for bylaw;

� the CSCe is obliged to keep secret theinformation maintained in the statutoryregister in a manner equivalent tobanking secrecy.

The keeping of part of the CSCe registermay (with authorisation from the CSCo) becontracted out to other legal entities. Thisrelates to secondary registers of holdings ofsecurities, maintained primarily by financialinstitutions engaged in portfolio managementfor their clients.

Before accepting a security for trading onthe public market, the CSCo must approveits prospectus (this does not apply togovernment bonds and securities issued bythe Czech National Bank) and assign it anISIN.

The CSCo, CSCe, Czech National Bank andMoF should provide one another with allinformation that might be significant for theiractivities, except where another legislativeact provides for certain specific informationnot to be provided (e.g. the Act on Banks).



The Czech National Bank collectsinformation on securities issues as part ofthe system of statements submitted by banksand foreign bank branches operating withinthe Czech Republic. It does so on theresidency principle, i.e. excluding foreignbranches of domestic banks. At present, itdoes not collect data from other non-bankcredit institutions, i.e. from credit unions(very small financial institutions providingcredits to their own members only), which -according to the legislation in force - maynot issue securities. Collection of data frommoney market funds is under preparation andis expected to be implemented in 2003. Allmandatory entities submit detailed statementson their own securities issues.


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Table 1Reporting coverage on securities issues statistics in the Czech Republic (as atend 2002)

Reporting institutionsNumber % (of the total category)

National central bank(s) - Czech National Bank 1 100Commercial banks 37 100

Universal commercial banks 3 1 100Building savings banks 6 100

Total 38 100

The Czech National Bank (Registration Centre)keeps a complete register in the STBS of allshort-term bond issues denominated inCzech koruna (see Sub-section 3.1.3).


Within the framework of money and bankingstatistics, banks and foreign bank branches(see Sub-section 3.2.1) submit a monthlystatement to the Czech National Bank onthe securities they have issued. Thestatement, which has been harmonised for2002 with the ECB�s requirements for theMFI balance-sheet statistics, is used toascertain the total balances on banks�securities issues accounts as of the end ofthe month in the prescribed breakdown (netof own securities purchased). Security-by-security information is not obtained.

The information in the statement is brokendown as follows:

� instrument breakdown:

� marketable securities issued;

- money market paper;

- coupon debt securities;

- zero-coupon (discounted) debtsecurities;

- mortgage bonds;

- subordinated debt securities;

- employee bonds;

- other debt securities;

� non-marketable securities issued;

- deposit bills of exchange;

- other bills of exchange;

� shares and interim certificates issued;

- ordinary (common) shares;

- preference shares;

- employee shares;

- other shares; and

- interim certificates and sharevouchers.

� original maturity breakdown:

� up to and including one year;

� over one year and up to and includingtwo years;

� over two years and up to andincluding four years; and

� over four years.


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For non-marketable securities, the maturitybreakdown is more detailed and correspondsto the breakdown used in money and bankingstatistics for deposits.

� holder breakdown by ESA 95 sector:

� Czech National Bank;

� commercial banks;

� government;

� households;

� other residents; and

� non-residents.

� currency breakdown:

� Czech koruna;

� euro;

� foreign currencies for which theCzech National Bank announcesforeign exchange market rates; and

� other currencies.

The data are collected electronically andstored in a central database containing allthe information for the entire data collectionhistory. This database is the basic source ofinformation for further data processingwithin the Czech National Bank (for analyses,publications, etc.).

The securities issued are recorded in theaccounts at their purchase price, inaccordance with applicable accountingstandards. For debt securities, this price iscontinuously increased by the accruedinterest from the moment the issue is settleduntil the moment of maturity.

The data collected does not includeinformation on the proportion of certificate,dematerialised or immobilised securities.Neither the conditions for nor the method

of settlement of the issue, nor the depositoryof certificate securities, are determined (theCSCe is the central �depository� ofdematerialised securities). As only the totalvolumes, not individual issues, are reported,no information is obtained from banks onthe numbering of the securities.

The securities issues are broken down bycurrency and by holder. It is thereforepossible to distinguish between paper issuedin currencies other than the domesticcurrency and paper held by non-residents.Owing to the technical problems banks havein determining the real holders of securitiesin some cases, especially securities in secondaryregisters, an alternative solution has beenestablished for the sector breakdown byholder in such cases. The proportion of thesecurities located on domestic markets andon markets abroad is not ascertained.

The data are compiled by the banks inaccordance with Act No. 563/1991 Coll., onAccounting, as amended, and with theMinistry of Finance Provision stipulating theChart of Accounts and AccountingProcedures for Banks and Certain FinancialInstitutions. The Accounting Act and relatedregulations are harmonised, with effect from1 January 2002, with the IAS and with therelevant EU directives.

The STBS contains in-depth information onall dematerialised Czech koruna bonds withmaturities of up to one year.

The register contains in-depth security-by-security information. The STBS RegistrationCentre assigns an identification code (ISINscan also be allocated) to the issues. Basicinformation on each security (issuer, issuedate, maturity date, volume of issue andprimary yield) is available to the generalpublic via the Internet on the Czech NationalBank�s website (www.cnb.cz).

The register includes information on eachissue, in particular its type, name, issue date,maturity date, face value, number ofsecurities, nominal volume, price at maturity,


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restrictions on transferability and informationon the issuer. The types of securities arebank bonds, bonds issued by the CzechNational Bank, government bonds, municipalbonds, and other bonds.

Although the bonds of various issuers maybe kept in the STBS, virtually the only issuersregistered in practice are the MoF and theCzech National Bank. The securities of otherissuers (usually financial institutions) rarelyappear in the system.

The data are stored in the database inelectronic form.

The STBS uses the primary data to processdaily average-price statistics for each registeredsecurity and monthly trading volume statisticsfor the short-term bond market as a whole.


The Czech National Bank has been collectinginformation on securities issues as part ofmoney and banking statistics since January1998. Over this period, several changes havebeen made to the structure of the data, partlyas a result of amendments to the legislationrelating to securities and partly in an attemptto accommodate the requirements ofinternational institutions. The structuredescribed above reflects the current situationwhich has been valid since January 2002.

The banks compile statements on their stocksof securities issued as at the last calendarday of each month. For each month exceptDecember, they send the data electronicallyby the 15th calendar day of the followingmonth, while data for December is sent bythe end of January of the subsequent year.

The information in the STBS is kept up todate according to the needs of the relevantsecurities issues; it has been stored in itscurrent structure since 1995.

The CSCe has been functioning as a registerof dematerialised securities and has, as partof its powers, been collecting information onindividual securities issues and owners since1993. The CSCo took over the role ofsupervisor of the capital market - and,accordingly, collection of the requisiteinformation - from the MoF, when it wasestablished in 1998.



When compiling statements for money andbanking statistics, the banks report month-end account balances. On collection, the dataare automatically checked at the CzechNational Bank to reveal any inconsistenciesboth within each statement and in relationto other statements (e.g. the total entry isnot the sum of the individual parts, the samedata are reported differently in two differentstatements, etc.). In the statement on thesecurities issued by the bank, this mainlyconcerns the balance sheet (Monthly Assetsand Liabilities Statement) of the bankcompiled for money and banking statistics.On the basis of these checks, banks areautomatically prompted to correct anyincorrect data. Moreover, a periodic check ismade where data from consecutive periodsare compared and unusually large deviationsare monitored. These are subsequentlyverified with the banks in question.


At present, a detailed analysis is beingconducted of the options for compiling timeseries in view of the changes made to thestructure of the statements. In recent years,the gradual harmonisation of bankingstatistics with EU/ECB standards (e.g. thechangeover to the ESA 95 sector breakdown)has had a major effect with regard to breaks


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in the time series. No methods to adjust thedata in the event of breaks in series arecurrently applied. When the reporting dutyof an entity ends (e.g. on withdrawal of itsbanking licence), there is no retrospectiveadjustment of the series, but the entity isexcluded from processing as from the nextperiod. Hence, at any given point in time, thesecurities issues statistics reflect the entirecurrent extent of the banking sector.

3.3.3 Revisions

The banks send all revisions electronically,and do so until consistency is achieved withrespect to the automatic checks made withinand between the statements and untildeviations in the series have been explained(see Sub-section 3.3.1). The period forsending revisions arising from failed checks isdefined by the time limits imposed for theprocessing of output data.

Banks can correct mistakes in the statements(including statements prior to the currentperiod) by sending new figures electronically.These are stored automatically (withoutnotification) in the database. When a revisedstatement is sent, it is automatically recordedby the system. The banks do not have toinform the Czech National Bank of therevision, nor do they have to provide anexplanation. The approach taken in thecorrection of mistakes is the same bothbefore and after the publication of the data.

In the STBS, all mistakes are correctedimmediately upon being detected. Systemparticipants are required to inform theRegistration Centre of any changes to andrevisions of their data, and the RegistrationCentre will modify its register accordingly.

3.4 Publications


Basic information on the securities issued bybanks is published in the monthly Banking

Statistics publication as part of the aggregatedbalance sheet of banks. The data are onlypublished in a basic breakdown by holder(resident and non-resident) and currency(Czech koruna, euro, and other foreigncurrencies). The publication is available inelectronic form on approximately the 36thday after the end of the period, on the CzechNational Bank�s website (www.cnb.cz).

Aggregated data from the monthly statementon the securities issued by the bank are notcurrently disclosed to the public.

Information from the STBS system ispublished in electronic form on the CzechNational Bank�s website (www.cnb.cz). Thelist of bonds registered in the STBS ispublished together with the daily average-price statistics for each issue and the monthlytrading volume statistics for the market as awhole. Also published on this website is anissuance schedule for Treasury bills andannouncements of auctions and their results.

On its website (www.scp.cz), the CSCepublishes information from its register (e.g.issues of dematerialised securities, issues ofapproved bonds, etc.). Similarly, on itswebsite (www.sec.cz), the CSCo publishesinformation on registered securities, whichin this case means securities accepted fortrading on the public market.


There are no other publications at present.

3.5 Users

The main users of the data are departmentsof the Czech National Bank (the MonetaryDepartment, Banking Supervision and others)and the MoF, who use the information fortheir monetary and other financial analyses.Public data on securities issues published bythe CSCe and the CSCo are used primarilyby investors, financial media and professionalsin the finance sector.


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4.1.1 Definitions

The use of derivatives in the Czech Republicis developing rapidly, especially in the bankingand financial services sectors. They take thestandard forms as described in internationally(chiefly IAS) accepted definitions.

A derivative is a financial instrument:

� the real value of which changes inresponse to the change in the real valueof the underlying instrument;

� for which a contract is agreed upon andsettled at a future date;

� which requires no initial net investment(deposit).

A financial instrument is a contract thatresults in a financial asset, on the one hand,and a financial liability or equity instrument,on the other.

Derivatives consist of swaps, forwardtransactions and futures. They are fixed forboth counterparties because theysimultaneously represent a fixed commitmentand a fixed receivable. Options give thepurchaser of the option (the holder) theright to buy (in the case of a call option) orsell (in the case of a put option) a specifiedunderlying instrument at a predeterminedprice on a specified date.

The term �derivatives� is usually used forboth fixed and option contracts, as themarket value of any fixed or option derivativecontract derives from the market value ofthe underlying (asset) instrument. This assetcould, for example, be a commodity, asecurity (including a government bond or ashare price index) or a currency.

Derivatives

Derivatives consist of swaps, forwardtransactions and futures. With theseinstruments, neither counterparty has anyoption once the contract has been concluded.The terms of the contract are fixed either inthe sense that all the payments andconditions of the contract are known inadvance (in the case of a forward transaction,for example), or that payments between thecounterparties depend solely on theunderlying exchange rates, interest rates (inthe case of interest rate swaps), share pricesor commodity prices.

Forward transactions

Under a forward contract, the purchaserundertakes to buy a specified quantity of anunderlying asset at a particular price(exercise price) on a stipulated date, and theseller undertakes to sell that quantity of theasset under the same conditions. The termsof the contract are described in detail in theagreement between the seller and the buyer.Transactions of this nature eliminate, interalia, the currency risk attached to futurepayments or receipts. Forward contracts aretraded on OTC markets only, and not onorganised exchanges.

Futures

As in the case of forward transactions,futures represent an undertaking on the partof the purchaser to buy a specified quantityof an underlying asset at a particular price(exercise price) on a stipulated future date,and an undertaking on the part of the sellerto sell that asset under the same conditions.Unlike forward contracts, however, futuresare traded on organised (derivative)exchanges only, and not on OTC markets.The terms of the contract - including assetstandardisation - are stipulated in detail bythe exchange on which the contract is traded.They differ from forward contracts in respectof the market�s organisational structure,



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valuation and settlement. The most commonunderlying assets for futures are marketindices, currencies and interest rates. Theposition of the purchaser who is to buy theasset in the future is termed a long position,whereas the seller�s position is termed ashort position.

Swaps

A swap commits the two counterparties toexchange specified underlying items atstipulated intervals in the future. With mostswaps, no exchange of underlying assetsactually occurs and periodic settlementpayments are made on fixed dates in thefuture. A swap in fact involves two or moreforward contracts which are interlinked.Swaps are transacted, for example, when anentity has a current lack of funds in onecurrency and a simultaneous surplus inanother.

Structured notes

In some cases, a derivative can be part of ahybrid financial instrument comprising a hostinstrument and a derivative (known as anembedded derivative) which affects the cashflow of the host instrument or alters itsproperties in some other way. The economiccharacteristics and risks of the embeddedderivative are not closely related to thecharacteristics and risks of the hostinstrument, and the embedded derivative isseparate from the host instrument, forexample, in the case of a put option or a calloption embedded in an equity instrument.

Options

Unlike forward contracts, futures and swaps,an option gives its holder the right, but notthe obligation, to buy or sell a particularasset on a specified day or after a specifiedperiod of time at a predetermined price (theexercise price). The writer (seller) meanwhileundertakes to sell or purchase the assetunder the same conditions. Depending onthe type of underlying asset, options can bedivided into those written on a spot asset

(where the holder has the right to purchaseor sell the asset directly) and those writtenon a futures contract (where the holder hasthe right to purchase or sell the asset via afutures contract). Options are transactedwith various financial assets - shares,currencies, debt securities, Eurocurrencydeposits, etc. With options, unlikederivatives, the position with regard to therights of the counterparties is asymmetric,as only one of them has the ability to choose.

The nominal value of a derivative does notchange during the maturity term. Inaccordance with Czech accounting standards,the nominal values of derivatives or ofunderlying instruments (underlying values)are included in the off-balance-sheet assetsor liabilities, as the nominal value of thederivatives is several times larger than thevalue of the total assets or liabilities.Conversely, the market value of derivativesis recorded as an on-balance-sheet asset orliability.

The market - or fair - value of a derivative iszero for both counterparties at the momentof its inception, changing in response tonumerous market factors, in particular themarket price of the underlying instrument.For one party, it is positive and, for theother, it is negative in the same magnitude.

In the Czech Republic, derivatives (includingoptions) can be broken down by purposeinto derivatives for trading and hedgingderivatives (i.e. derivatives contractsconcluded for the purpose of hedging).Derivatives can be broken down further intorisk categories by type of underlying asset(type of market risk). There are thus interestrate, equity, commodity and currencyderivatives.

� interest rate derivatives are contracts forinterest rate yields at a specific futuredate;

� equity derivatives are contracts for thepurchase and sale of shares in the future;


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� commodity derivatives concern thepurchase or sale of particularcommodities in the future; and

� currency derivatives are contracts for thepurchase and sale of particular currenciesin the future.

Derivatives are sometimes broken down intofinancial and non-financial derivatives.Financial derivatives include interest rate,equity, commodity (restricted to preciousmetals, i.e. gold, silver, platinum andpalladium) and currency derivatives. Non-financial derivatives are commodityderivatives, except where the underlyingasset is a precious metal.


Developments on the derivatives market areone of the key factors in the Czech NationalBank�s decision-making regarding the volumeof its daily open market operations. Otherfactors include analyses and predictions ofbanking sector liquidity, the situation on thedomestic money market, the currentsituation on bond and foreign exchangemarkets, and other relevant issues. Openmarket operations are the fundamentalinstrument for implementing monetary policy.The Czech National Bank uses suchoperations on a day-to-day basis to influencebanking sector liquidity and short-terminterest rates, and thereby to signal itsmonetary policy stance. For these operations,the Czech National Bank regularly monitorsforward rate agreements (with maturities ofthree and six months and a delay of thecontract beginning by three, six and ninemonths) and interest rate swaps (withmaturities of one to ten years and 15 years).

The Czech National Bank also uses statisticson banking sector derivatives for balance ofpayments and banking supervisory needs andfor analysing developments in the bankingsector and financial markets.


The key legislation setting out the powers ofthe Czech National Bank and the duties ofbanks in the field of data collection is ActNo. 6/1993 Coll., on the Czech NationalBank, as amended, and Act No. 21/1992 Coll.,on Banks, as amended. Pursuant to theseacts, the Czech National Bank is authorisedto require banks, foreign bank branches andother financial institutions to provide it withthe information and documents it needs inorder to perform its duties. Under Act No.6/1993 Coll., the Czech National Bank issuesprovisions stipulating the submission ofstatements by banks and foreign bankbranches to the Czech National Bank andthe methodology for compiling thosestatements. For the year 2002, thoseprovisions are: Czech National BankProvision No. 6 of 30 November 2001 andCzech National Bank Provision No. 7 of 19December 2001 (see Part 1 of theMethodological Manual for further details).Under these regulations, banks and foreignbank branches are also required to compileand submit statements containing informationon their derivative transactions.

As with the other statistics, the CzechNational Bank is also authorised to collectdata on derivative transactions from otherfinancial institutions. At present, however,no requirements regarding the collection ofdata from such institutions are applied.



In the area of financial derivatives statistics,the only entities reporting directly to theCzech National Bank are banks and foreignbank branches. The Czech National Bankobtains operating data on derivatives tradeschiefly from agency information (Bloomberg,Reuters, etc.).


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The Czech derivatives market is heavilyconcentrated in the Czech banking sector,i.e. in Czech banks and foreign bank branches.The derivatives contracts executed by banksusually involve OTC trades. In addition,numerous Czech entities trade in derivativeson overseas derivatives markets, theintermediaries again being mainly banks andforeign bank branches in the Czech Republic.Some large Czech entities trade derivativesdirectly OTC with foreign financialinstitutions.


The financial derivatives data collected bythe Czech National Bank from banks andforeign bank branches form part of thefollowing statements:

In the area of monetary statistics and thebalance of payments:

� The monthly assets and liabilitiesstatement (i.e. balance sheet for moneyand banking statistics), compiled inaccordance with ECB methodology,which gives the on-balance-sheet fairvalues of financial derivatives overall,broken down by Czech koruna, euro andother foreign currencies and by residentsand non-residents.

� The monthly statement on the foreignexchange and Czech koruna position ofthe bank, which gives the fair values offinancial derivatives broken down intoderivatives and options, with a furtherbreakdown into Czech koruna, convertiblecurrencies and non-convertiblecurrencies and into residents and non-residents. These statements include basicinformation on off-balance-sheet assetsand liabilities which also includereceivables and payables from derivativesand options at face value (not brokendown any further by type of derivative).

Both statements are compiled on theresidency principle and are submitted by

banks and foreign bank branches in theCzech Republic.

For banking supervisory needs:

The monthly bank balance sheet, compiledas a financial statement in accordance withdomestic accounting standards, whichmonitors financial derivatives broken downinto Czech koruna and foreign currencies,into residents and non-residents, and into:

Derivatives:

� interest rate derivatives;

� currency derivatives;

� equity derivatives;

� commodity derivatives; and

� credit derivatives.

Options:

� interest rate options;

� currency options;

� equity options;

� commodity options; and

� credit options.

In the balance sheet for banking supervisoryneeds, the fair values of derivatives formpart of the on-balance-sheet assets andliabilities.

This balance sheet includes off-balance-sheetitems containing the face values of thereceivables and payables from derivatives,broken down into transactions in interestrates, currency, equity, commodity and creditinstruments, and with simultaneousbreakdowns into forward transactions,futures and swaps. Also monitored in theoff-balance-sheet items are the face values ofthe receivables and payables from options,


Czech Republic

broken down into transactions in interestrates, currency, equity, commodity and creditinstruments, and with simultaneousbreakdowns into purchased and sold options.

The balance sheet for banking supervisoryneeds is compiled in full conformity with theCzech regulations on accounting and on thecompilation of the financial statements ofbanks, which - as from 2002 - are harmonisedwith IAS (and the relevant EU directives).Banks and foreign bank branches submit theirbalance sheet in the Czech Republic, includingbank branches abroad.

The data are collected electronically andstored in a central database. This databasecontains all the data from the originalcollection and serves as the basic source ofinformation for further data processingwithin the Czech National Bank (see Part 1of the Methodological Manual).

The methodology for reporting derivativesin the banking statistics is based on the MoFProvision stipulating the Chart of Accountsand Accounting Procedures for Banks andCertain Financial Institutions, which is based,in turn, on the IAS (IAS 32 and IAS 39, inparticular). The differences between thedomestic rules and IAS 39 are negligible anddue to the alignment of the financial riskmanagement prescribed for capital adequacyand the accounting rules.

The harmonisation of the domesticaccounting standards in 2002 has led to anexact delimitation in the Czech Republic ofthe accounting regime for derivatives and,subsequently, also to the setting of an exacttaxation regime for derivatives. This is dueprimarily to the application of IAS 39 whichclearly distinguishes between hedgingderivatives and trading derivatives. Given thattransactions of derivatives for the purposesof tax avoidance will soon no longer bepossible, an overall reduction in the volumeof derivative trades can be expected.Derivative trades will be limited mainly tocontracts between market makers and finalusers (hedgers).

The Czech National Bank uses agencyinformation to monitor routine marketdevelopments (prices and trading volumes).


The Czech National Bank has been collectingdata on the fair values of financial derivativesfrom banks since 1 January 2000. Data onoff-balance-sheet receivables and payablesfrom financial derivatives transactions atnominal value have been reported by thebanks since 1 January 1996.

Statements giving data on financial derivativesare submitted monthly. From January toNovember, the banks submit the monthlyassets and liabilities statement by the 15thcalendar day of the following month, whilethat for December is submitted by the endof January of the subsequent year; themonthly statement on the foreign exchangeand Czech koruna position of the bank fromJanuary to November is submitted by the17th calendar day of the following monthand by the end of January of the subsequentyear for December; and the monthly balancesheet of the bank from January to Novemberby the 20th calendar day of the followingmonth and by 10 February of the subsequentyear for December.



In the money and banking statisticsstatements relating to financial derivatives,the banks report the values of the balanceson the relevant accounts as of the lastcalendar day of the month.


Czech Republic


Breaks in series ensue mainly from changesin the accounting standards for banks - asfrom 2002, for instance, credit derivativesare monitored separately, whereas they weremonitored together with interest rateinstruments until 31 December 2001.

The information on derivatives collectedthrough bank statements is used at the CzechNational Bank mainly as specific data onindividual banks. In the case of theaggregation for the banking sector as a whole,there is no retrospective adjustment of theseries if the reporting duty of a bank ends(e.g. on withdrawal of its banking licence).Similarly, in the derivatives area, bankingstatistics reflect the entire current extent ofthe banking sector.

4.3.3 Revisions

Revisions to statements are sent by bankselectronically. These revisions can be madeat the initiative of the reporting bank when itdiscovers incorrectly reported data, or atthe request of the Czech National Bank inthe event of failures of its intra-statement orinter-statement checks. The system of checksis the same for all banking statistics (see Part1 of the Methodological Manual for furtherdetails).

The revisions are stored automatically in thedatabase and the original data areoverwritten. The banks can also revise datafrom periods pre-dating the immediatelypreceding period.

The correctness of the data is checked beforepublication. In the event of subsequentrevisions (i.e. after publication), users at theCzech National Bank are notified of thechanges. In publications made available tothe public, revisions made to the previousmonth�s data and retrospectively revised dataare not published. Conversely, data in timeseries are continually updated to incorporaterevisions.

4.4 Publications


For external users, the Czech National Bankissues a monthly Banking Statistics publication(as from 1 January 2002 in electronic formonly) on its website (www.cnb.cz). This isusually published on the 5th calendar day ofthe second month after the period underreview. The section on the balance sheets ofcommercial banks gives the overall fair valuesof derivatives in the Czech banking system.This information is based on the monthlyassets and liabilities statement for money andbanking statistics.

The Banking Regulation Department regularlypublishes current information about thebanking sector on the Czech National Bank�swebsite (www.cnb.cz). This contains off-balance-sheet information on financialderivatives at nominal value, based on themonthly balance sheet of the bank compiledfor banking supervisory needs.


At present, there are no other CzechNational Bank publications for the disclosureof information on financial derivatives in thebanking sector.

4.5 Users

The main users of the data at the CzechNational Bank are the Monetary Analysesand Public Finance Division, the Balance ofPayments Division, the Financial MarketsDepartment and the Banking RegulationDepartment.

The main external users are the MoF, theCSO, the Ministry of Industry and Trade, theSupreme Audit Office, selected financialinstitutions, and the financial media andprofessionals in the finance sector.


Czech Republic


5.1.1 Definitions

Interest rates in the Czech Republic are eitherfixed or floating in nature. They cantherefore be agreed in specific loanagreements or stipulated (or agreed) bycredit institutions for individual depositproducts. In the Czech Republic, clientinterest rates (which, in ECB parlance, areanalogous to the �retail interest rates�) arethe rates at which commercial banks grantloans to, and accept deposits from, theirclients. Clients are taken here to mean allsectors except bank MFIs (commercial banksand the central bank). The interest ratestatistics in the Czech Republic are based onmonitoring all client sectors and are notlimited to non-financial institutions andhouseholds.


In providing for its primary objective, i.e.ensuring price stability by means of inflationtargeting, the Czech National Bank uses asystem of selected monetary policyinstruments. At present, these chieflycomprise the Czech National Bank�s keyinterest rates (the discount rate, the lombardrate and the two-week repo rate). The CzechNational Bank makes active use of theseinstruments to affect the interest rates ofother MFIs. Through the monetarytransmission mechanism, it indirectlyinfluences the evolution of its primaryobjective. The Czech National Bank monitorsa whole range of interest rates used by banks,especially with respect to how changes inthe Czech National Bank�s key interest ratesare reflected in the client rates of each bank.Interest rates on newly drawn loans, on thetotal stock of loans and on the total stock ofdeposits are monitored, broken down bymaturity, type of loan/deposit, currency andclient sector.


The key legislation setting out the powers ofthe and the duties of banks in the field ofdata collection is Act No. 6/1993 Coll., onthe Czech National Bank, as amended, andAct No. 21/1992 Coll., on Banks, as amended.Pursuant to these acts, the Czech NationalBank is authorised to require banks, foreignbank branches and other financial institutionsto provide it with the information anddocuments it needs in order to perform itsduties. Banks and foreign bank branches areobliged to process and submit to the CzechNational Bank information and documentswhose content, form, breakdown and datesand methods of submission are stipulated bythe Czech National Bank in its regulations(known as �Provisions�). For the collectionof the data, pursuant to the Czech NationalBank Act the Czech National Bank issuesprovisions specifying the methodology forcompiling statements and other reportingconditions (see Part 1 of the MethodologicalManual). The provisions currently in forceare as follows: Czech National Bank ProvisionNo. 6 of 30 November 2001 stipulating thesubmission of statements by banks andforeign bank branches to the Czech NationalBank and Czech National Bank Provision No.7 of 19 December 2001 stipulating themethodology for compiling the statementssubmitted to the Czech National Bank bybanks and foreign bank branches.

These regulations include a detailedspecification of the statements and themethodology for banking interest ratesstatistics. The Czech National Bank is alsoauthorised under the Czech National BankAct to collect data for interest rate statisticsfrom non-bank financial institutions, i.e. fromcredit unions and OFIs (e.g. on consumercredit for hire purchase). At present,however, the Czech National Bank appliesno requirements with regard to the collectionof data from such institutions.



Czech Republic



The Czech National Bank collectsinformation on interest rates from banks andforeign bank branches operating within theterritory of the Czech Republic. It does soon the residency principle, i.e. excludingforeign branches of domestic banks. Forinterest rate statistics it currently does notcollect data from non-bank MFIs, i.e. fromcredit unions. Owing to their negligible shareof the total loans granted and depositsaccepted by the MFI sector in the CzechRepublic, credit union interest is not - andin the near future will not be - included inthe interest rate statistics for the area ofdeposits and loans.


All banks and foreign bank branches (seeSub-section 5.2.1) submit information forinterest rate statistics to the Czech NationalBank in the following areas:

Loans granted

The monthly statement on the stocks of loansto and receivables from clients by interestrate gives an overview of the stock andstructure of bank loans granted to andreceivables from clients (including generalgovernment), as of the last day of the month,broken down as follows:

� by interest rate (i.e. the contractuallyagreed interest rate valid on the day thestatement is compiled, i.e. the lastcalendar day of the relevant month);

� by original maturity:

� up to and including one year,

� over one year and up to and includingfour years,

� over four years and up to andincluding five years, and

� over five years;

� by currency (the Czech koruna and theforeign currencies for which the CzechNational Bank announces foreignexchange market rates);

� by type of loan:

� operating loans (including export andimport loans),

� loans for residential property forbusiness purposes,

� standard loans from building savingsbanks,

� bridging loans from building savingsbanks,

� mortgages without state allowances,

Table 2Reporting coverage of MFI interest rate statistics in the Czech Republic (as at end2002)

Reporting institutionsNumber % (of the total category)

National central bank(s) - Czech National Bank 0 0Commercial banks 37 100

Universal commercial banks 31 100Building savings banks 6 100


Czech Republic

� mortgages with state allowance,

� loans for former general housingconstruction,

� loans for purchases of securities,participations and privatisationholdings,

� other investment loans (includingimport loans),

� consumer credits for real estate,

� consumer credits for goods, servicesand other purposes,

� overdraft facilities and debit balanceson current accounts,

� business financial loans, and

� consumer financial loans;

� by the client�s/debtor�s economic sub-sector (sector breakdown in accordancewith the ESA 95).

The monthly statement on the drawing ofloans by clients by interest rate gives anoverview of newly drawn loans granted bythe bank to its clients (including generalgovernment) in the relevant month, brokendown as follows:

� by interest rate (i.e. the contractuallyagreed interest rate valid on thedrawdown date of the relevant part ofthe loan);



� over one year and up to and includingfour years,


� over five years;

� by currency (the Czech koruna and theforeign currencies for which the CzechNational Bank announces foreignexchange market rates); and

� by the client�s/debtor�s economic sub-sector (sector breakdown in accordancewith the ESA 95).

Deposits and loans received

The survey of deposits and loans receivedbroken down by currency and interest rategives an overview of the stock and structureof the deposits and loans received by thebank from its clients (including generalgovernment), as of the last day of the month.The data are broken down as follows:

� by interest rate (i.e. the contractuallyagreed interest rate valid on the day thestatement is compiled, i.e. the lastcalendar day of the relevant month);


� on demand (no maturity term given),


� over one year and up to and includingfour years, and

� over four years;

� by currency (the Czech koruna and theforeign currencies for which the CzechNational Bank announces foreignexchange market rates); and

� by the client�s/creditor�s economic sector(sector breakdown in accordance withthe ESA 95).

The statement was not fully harmonised withbalance sheet statistics and , has not beenapplied since September 2002.

As from 2002, the Czech National Banksimultaneously collects a monthly statementon deposits and loans from clients by interest


Czech Republic

rate - an expanded version of the precedingstatement. This differs from the latter in thatit introduces further breakdowns. Some ofthe details of the existing breakdowns alsodiffer. The breakdowns used in this statementare based on the structure of the statementon interest rates applicable to loans and onthe deposit structure reported in theharmonised bank balance sheet in accordancewith ECB requirements (excluding non-marketable securities). The statement is againbased on stock as of the last day of themonth. The information is further brokendown by:

� deposit type:

� deposits on current accounts

� fixed-purpose demand deposits

� other demand deposits

� savings deposits redeemable ondemand

� time deposits redeemable at notice

� savings deposits redeemable at notice

� building saving deposits redeemableat notice

� fixed-purpose deposits redeemable atnotice

� time deposits with agreed maturity

� savings deposits with agreed maturity

� building saving deposits with agreedmaturity

� fixed-purpose deposits with agreedmaturity

� certificates of deposit

� subordinated deposits

� subordinated loans (received)

� loans from repo transactions(received)

� other loans received

� The original maturity has been enlargedto include:

� demand (deposits without any agreedmaturity on current accounts and thelike),

� up to 24 hours,

� over one day and up to and includingthree months,

� over three months and up to andincluding one year,

� over one year and up to and includingtwo years,

� over two years and up to andincluding four years,


� over five years.

The interest rates are reported to tenths ofone per cent. In terms of content theinformation on loans granted and depositsand loans received (excepting non-marketable securities) used in the interestrates statistics is identical to the definitionsand valuations used in the harmonised bankbalance sheet statistics.

The data are collected electronically andstored in a central database containing allthe information for the entire data collectionhistory. This database serves as the basicsource of information for further dataprocessing within the Czech National Bank(for analyses, publications, etc.).

The data are compiled by the banks inaccordance with Act No. 563/1991 Coll., onAccounting, as amended, and with the


Czech Republic

Ministry of Finance Provision stipulating theChart of Accounts and AccountingProcedures for Banks and Certain FinancialInstitutions. The Accounting Act and relatedregulations are, with effect from 1 January2002, harmonised with the IAS and with therelevant EU directives. The accounting figuresare adjusted in accordance with the ECB�srequirements for the balance sheet of theMFI sector - e.g. valuation of loans anddeposits at their nominal value.


Information on interest rates has beencollected for loans and deposits in Czechkoruna since 1993. Since 1997 the figureshave also included foreign currency loans anddeposits. Several changes have been made tothe structure of the data since 1993 (e.g. thechangeover to the ESA 95 sector breakdown,changes in maturity, the introduction ofadditional breakdowns). The structuredescribed above (see Sub-section 5.2.2)reflects the current situation valid sinceJanuary 2002.

Banks submit interest rate statements eachmonth. From January to November, the stockdata are sent electronically by the 17thcalendar day of the following month and bythe end of January of the subsequent yearfor December, while the data on newlydrawn loans (including the figures forDecember) are submitted by the 17thcalendar day of the following month.



The volumes of loans and deposits at eachinterest rate are reported according to thebalances on loan and deposit accounts as ofthe end of the period under review. Onlythe statement on newly drawn loans records

the drawings (i.e. the relevant turnovers onaccounts) for the entire period under review(i.e. month). All calculations are performedafter the data have been collected, duringprocessing at the Czech National Bank. TheCzech National Bank calculates averageinterest rates as a weighted arithmeticaverage, with the weights being the volumeloans granted/deposits received at the specificinterest rate levels.


At present, a detailed analysis is beingconducted of the options for compiling timeseries, given the changes made to thestructure of the statements. In recent years,the gradual harmonisation of bankingstatistics with EU/ECB standards (e.g. thechangeover to the ESA 95 sector breakdown)has had a major effect with regard to breaksin the time series. No methods to adjust thedata in the event of breaks in series arecurrently applied. Where the reporting dutyof an entity ends (e.g. on withdrawal of itsbanking licence), there is no retrospectiveadjustment of the series, but - starting fromthe next period - the entity is excluded fromthe processing. Hence, at any given point intime the interest rates statistics reflect theentire current extent of the banking sector.

5.3.3 Revisions

On collection, the data are automaticallychecked at the Czech National Bank to revealany inconsistencies both within eachstatement and in relation to other statements(e.g. the total entry is not the sum of theindividual parts, the same data are reporteddifferently in two different statements, etc.).On the basis of these checks, banks areautomatically prompted to correct anyincorrect data. Moreover, a periodic check ismade where data from consecutive periodsare compared and unusually large deviationsare monitored. These are subsequentlyverified with the banks in question.


Czech Republic

The banks send all revisions electronically.Before using the data, the Czech NationalBank waits until all the banks supplyconsistent information with respect to theautomatic checks within and between thestatements and until the deviations in theseries have been explained. The period forsending revisions arising from failed checks islimited by the time limits imposed for theprocessing of output data.

Banks can correct mistakes in the statements(including statements prior to the currentperiod) by sending new figures electronically.These are stored automatically (withoutnotification) in the database. When a revisedstatement is sent, it is automatically recordedby the system. The banks do not have toinform the Czech National Bank of therevision, nor do they have to provide anexplanation. The approach taken in thecorrection of mistakes is the same bothbefore and after the publication of the data.The data are published in time series whichincorporate any revisions made.

5.4 Publications


Information on interest rates is published inthe monthly Banking Statistics publication.This information is obtained from theaforementioned statements on bank interestrates. The rates are published as monthly,quarterly and annually weighted arithmeticaverages, broken down into the maineconomic sectors and maturities for loansand deposits in Czech koruna. Thepublication is available on approximately the36th day after the end of the period from

the Czech National Bank�s website(www.cnb.cz).

A basic overview of the interest rates onnew loans and on the outstanding amountsof loans and deposits is posted on the CzechNational Bank�s website prior to publicationon the 30th day after the end of the period(see www.cnb.cz).


The Czech National Bank has recently startedsending interest rate statistics to the ECB.These are sourced from the Czech NationalBank�s statistics, the banks� statisticalstatements and the PSE. The data are sentmonthly and contain the official CzechNational Bank rates, money market rates,capital market rates and bank interest rates.The bank rates consist of rates on new loansgranted to non-financial institutions andhouseholds, rates on the stock of loansgranted to non-financial institutions andhouseholds, and rates on the stock of depositsreceived from non-financial institutions,households and non-profit institutions servinghouseholds. The rates on deposits are brokendown into rates on deposits on currentaccounts, deposits with agreed maturity, anddeposits redeemable at notice. The data aresent in GESMES/CB format.

5.5 Users

The main users of the interest rate data aredepartments of the Czech National Bank.External users include the CSO, the MoF,financial institutions, the financial media andthe public.


Mr. Zbynek KarnetMoney and Banking Statistics Departmentphone: +420/22441 4446fax: + 420/22441 2136 or +420/22441 2147e-mail: [email protected]

6 Contacts at the Czech National Bank


Czech Republic

Ms. Iva ChrtkovaMoney and Banking Statistics Departmentphone: +420/22441 2121fax: +420/22441 2136 or +420/22441 2147e-mail: [email protected]

Ms. Magda GregorovaMoney and Banking Statistics Departmentphone: +420/22441 2134fax: +420/22441 2136 or +420/22441 2147e-mail: [email protected]

Mr. Josef JilekBanking Regulation Departmentphone: +420/22441 3017fax: +420/22441 2239e-mail: [email protected]

Estonia


Estonia


ECSD Estonian Central Securities Depository

EEK Estonian kroon


EUR euro

FISIM financial intermediation services indirectly measured

FSA Financial Supervisory Authority

HEX Helsinki Stock Exchange




TALIBID Tallinn interbank bid rate

TALIBOR Tallinn interbank offered rate

TALSE Tallinn Stock Exchange Index

TSE Tallinn Stock Exchange

USD US dollar


Estonia


1.1.1 Introduction

According to the Law on Credit Institutions,a financial institution is a company other thana credit institution, the principal andpermanent business of which is to acquireholdings or to conduct one or more of thefollowing activities:

� lending transactions;

� leasing transactions;

� money transmission services;

� issue and administration of non-cashmeans of payment; guarantees andcommitments and other transactionsinvolving off-balance sheet items;

� transactions in foreign exchange, financialfutures and options, exchange rate andinterest rate instruments, transferablesecurities as well as other money marketinstruments for its own account or forthe account of clients;

� the provision of services related to theissue and sale of securities, the provisionof advice to clients on issues concerninginvestments and economic activities andthe provision of services related to themerger, division or acquisition of companies;

� money broking;

� portfolio management;

� safekeeping and administration ofsecurities;

� credit reference services;

� safe custody services;

� other transactions which are essentiallysimilar to those mentioned above.

Financial institutions are not allowed toaccept deposits and other repayable fundsfrom the general public.

The following other financial intermediaries(OFIs) play a more important role in theEstonian financial market: investment firms,fund management companies andcorporations engaged in financial leasingbusiness. The other entities in this sub-sectorinclude financial institutions engaged inlending, as well as foreign exchange andbrokerage firms. Financial auxiliaries alsocomprise a financial guarantee corporation,i.e. the Deposit Guarantee Fund, and thestock exchange.

In accordance with the law, investment firmsand funds report to the Financial SupervisoryAuthority (FSA). The six largest leasingcompanies regularly report to the Bank ofEstonia on a voluntary basis.

The Estonian Statistical Office collectsbalance sheet and profit and loss accountdata from the OFI sector on a quarterlybasis. In the case of the six largest leasingcompanies, however, the Statistical Officerelies on the data collected by the Bank ofEstonia.

Whether a company is a monetary financialinstitution (MFI) or an OFI is determined bywhether its business is to receive depositsand/or close substitutes for deposits frominstitutional units other than monetaryfinancial institutions and, for its own account,to grant loans and/or make investments insecurities.

The following explanations cover only themost important sub-sector of the OFI sector,as there is not enough information availableon the other sub-sectors to warrant theirinclusion in this list.



Estonia

1.1.2 Definitions

Investment firm - a corporation the principaland permanent activity of which is toconclude investment and/or additionalinvestment services to third parties.

Investment fund - a pool of assets establishedfor a collective investment (contractual fund)or a public limited company founded forcollective investment, which is or the assetsof which are managed on the principle ofrisk-spreading by a management company.Investment funds are not legally independentbut are governed by management companies.

Fund management company - a public limitedcompany whose sole area of activity is themanagement of funds. The management offunds involves organising the issue of stocksor units of the fund, investing the assets ofthe fund, keeping accounts of the assets ofthe fund and other activities directly relatedto the above. The fund�s accounts must bekept separate from the managementcompany�s accounts.

Leasing company - a corporation engaged infinancial leasing business.


In addition to an increasing amount offinancial intermediation, Estonia is facing asustained process of diversification in financialservices and products, along with theinstitutions that provide them. During thedevelopment of pension reform processes,the role of investment services will gain inimportance, whereas the currently largelyloan and leasing-driven growth in financialservices will be transformed into a morecomplex set of different financial services.Therefore, OFI statistics are essential formonetary policy analysis, as they foster theformulation of aggregated views on realfinancial assets and liabilities.

Moreover, in order to monitor financialsector developments and to assess the

conditions underlying financial stability, it isnecessary to have appropriate informationon OFI activities (in addition to bankingsector statistics). In the conglomeratedfinancial sector in particular, the input ofOFI statistics is important in order to reviewthe environment for banks� macroprudentialanalysis. In other words, the collection ofdata on OFI activities promotes a morecomplex assessment on the stance withrespect to financial stability.

1.1.4 Powers to collect statistics

In accordance with the Financial SupervisoryAuthority Act (Sections 1 and 6), investmentfunds, fund management companies andinvestment firms are obliged to report tothe FSA.

There are no legal powers granted to theBank of Estonia or to the FSA to collectstatistics from financial leasing companies.The six largest leasing companies report ona voluntary basis.

According to the Official Statistics Act, whichcame into effect on 17 July 1997, all entitiesin Estonia are required to submit datacollected through official statistical surveysto agencies entrusted with conducting suchsurveys (Section 7).



There are seven fund managementcompanies, which manage 20 investmentfunds (this figure also includes seven moneymarket funds classified as MFIs). All fundmanagement companies and investment fundsare subject to reporting requirements.Investment firms number 19, all of which arealso subject to reporting requirements.Leasing companies number approximately 26institutions, of which the six largest currentlyreport their data. Of the total assets forinstitutions mentioned in this section, the


Estonia

assets of leasing companies account for 86%,the assets of investment firms for 12.7% andthe assets of investment funds for 1.3%.


Investment funds report balance sheet data,data on investments, profit and loss accounts,and flows of assets and off-balance-sheetcommitments. Data are reportedelectronically.

Investment firms currently report balancesheet data. Collection of data on securities,resources and loans will begin in the nearfuture. Data is reported electronically.

Leasing companies - the six largest companiesregularly report balance sheet data, profitand loss account data, as well as data onleasing, factoring and resources to the Bankof Estonia on a voluntary basis. The data arecollected electronically.

In the case of investment funds and leasingcompanies, different instruments, maturityand sector splits of balance sheet data areavailable. The balance sheets of investmentfunds are currently less detailed than thoseof other entities.


Some investment firms will be obliged(depending on the type of services they offer)to report on a monthly basis, while theothers will have to do so on a quarterlybasis. Data have to be delivered by the tenthcalendar day following the end of the monthor the 20th calendar day following the endof the quarter.

Investment funds report data on investmentson a monthly basis, by the tenth calendar dayfollowing the end of the month, and balancesheet data, profit and loss account data, flowsof assets and off-balance-sheet commitmentstwice a year.

Leasing companies report data on leasing,factoring and resources on a monthly basis;balance sheet data and profit and loss accountdata are received quarterly. Data have to bedelivered by the 15th calendar day followingthe end of the reporting period.



The reporting system of investment firms iscurrently being modified and improved. UntilSeptember 2001, no data were collectedfrom investment firms. New reports that willbe drafted and are expected to come intoeffect in 2003 will be fairly detailed andinformative.

Since January 2002, leasing companies havereported data in accordance with a new andmore detailed reporting system.

The reporting system for investment fundsdeveloped by the Minister of Finance in July1998 has not been changed since.

1.3.2 Revisions

Data on leasing companies, investment firmsand investment funds are due for revision inthe near future. Data on leasing companieshave been available on the Bank of Estonia�swebsite since September 2002. Revisions aremade as the occasion requires. As data oninvestment firms and investment funds arenot published, there are no specific rulesconcerning revisions.

1.4 Publications

Data on investment funds and on investmentfirms are not published at present. Data onleasing companies are not published by theBank of Estonia.


Estonia

1.5 Users

Data on mutual funds and investment firmsare mainly used by the FSA for supervisory

purposes. Data on leasing companies are usedby analysts at the Bank of Estonia, the FSA,leasing companies, the Association of LeasingCompanies and the general public.


2.1.1 Definitions

Estonian kroon money market

The Estonian kroon money market comprisesthe markets for short-term interbankdeposits/loans, for debt securities and forforeign exchange forward transactions andswaps, as no Treasury bills are issued by thestate. In comparison with the market forforeign exchange forward transactions andthat for debt securities, the interbank moneymarket is geared more to the short term,with trading involving mainly maturities ofless than three months. The segment withthe highest turnover is the market forforward transactions.

Estonian kroon interbank moneymarket rates

In the early years of the Estonian kroon(EEK), and despite the large number ofinstitutions, the volume of money markettransactions was low and active trading wasonly carried out in overnight funds. Theintroduction of the euro established a newreference rate for the Estonian moneymarket. In 2000 and 2001, in a favourableliquidity environment, the Estonian interbankmoney market rates followed EURIBOR ratesmore closely than ever before, and this trendcan be expected to continue.

Foreign banks are very active in the interbankmarket for short-term deposits and loans.Under the current rules, the money marketrates (the Tallinn interbank bid rate -TALIBID - and the Tallinn interbank offeredrate - TALIBOR) are fixed by the Bank ofEstonia daily at 11 a.m. on the basis of


quotations by the five major market players(the Estonian Hansapank, Eesti Ühispank(Union Bank of Estonia) and Sampo Pank,the Finnish Nordea Pankki and the SwedishSvenska Handelsbanken).

Debt securities market

Unlike the situation in many other countries,owing to prudent fiscal policies, governmentsecurities have not been the driving forcebehind the development of non-bank financialmarkets in Estonia. Therefore, the securitiesmarket in Estonia is primarily an equitymarket, and the debt market has developedonly in accordance with private sectorinstruments and needs, being mainly aprimary market with private placements anda modest secondary market. Despite its smallsize, the market for fixed income instrumentshas become an increasingly importantprovider of alternative financing formarketable companies and local government.The main issuers on the market are Nordicfinancial conglomerates, which are also majorshareholders in Estonian credit institutions.Their bond issues cover approximately 85%of the primary market, reflecting the highintegration of Estonian and Nordic financialmarkets. Four debt securities are currentlylisted on the Tallinn Stock Exchange (TSE),while the rest are traded over the counter(OTC).

Stock market

The structure and framework of thesecurities market has evolved over the lastfive years. The opening of the TSE in 1996was a success, thanks to investors� interest(both local and foreign) and remarkableinvestment.


Estonia

In the main trading list of the TSE, five shareswere listed at the end of 2002. The secondarylist contained nine shares. Besides these,privatisation vouchers are also traded.

The Tallinn Stock Exchange Index (TALSE) iscalculated daily and reflects the movement ofprices of shares included in the main andsecondary lists of the TSE, comparing thecompound market capitalisation plusdividends paid to the corresponding datafrom the previous trading day. The TALSE iscalculated in line with the principles of chain-linked and total-return indices. No weightinglimits are applied to TALSE constituents, sothat the influence of each security on theTALSE corresponds to its weight in thecompound market capitalisation. The Paacheindex formula is used to calculate the TALSE.The base value of the TALSE is June 1996 =100.

Considering the small size and the opennessof the Estonian economy, the developmentof the TSE called for its integration into thesecurities markets in neighbouring regions.In April 2001, the Helsinki Stock Exchange(HEX) acquired an ownership share of 52.4%in the TSE. In 2002, trading with Estoniansecurities began in the HEX trading system.

Foreign exchange market

Thanks to the way the currency board hasbeen set up, the Bank of Estonia, the centralbank, offers credit institutions an unlimitedforeign exchange purchase and sale facilityfor all major currencies (including the euroand the US dollar) against the Estonian kroon.In practice Estonian commercial banksnowadays purchase the euro only from thecentral bank, as there is no bid-offer spreadfor euro transactions. The foreign exchangewindow offered by the Bank of Estonia is thekey element of the liquidity system.

The turnover of the Estonian foreignexchange market (both spot and forward) isaround EUR 4 billion per month (EUR 1.3billion per ten-day period) and transactionsinvolving Estonian kroon represent around a

quarter of the total trading volume. Theother key trading currencies are the euroand the US dollar. The main counterparts todomestic credit institutions are non-residentbanks and resident companies. Non-residentbanks are active in both the spot and forwardmarkets, and their share in total foreignexchange market turnover is nearly 50%.Companies have been relatively more activeon the spot market and have a share ofaround a third of total foreign exchangemarket turnover.

The main instruments traded in the Estonianforeign exchange market are spottransactions and foreign exchange swaps,with each having a more or less equal tradingvolume. The foreign exchange swap marketin Estonia is more liquid than the moneymarket and the transaction volumes aregreater. The main participants in the foreignexchange swap markets are domestic andforeign banks, followed by non-financialcompanies.

Commodity market

At present, there is no commodity market inEstonia.


The Bank of Estonia collects financial marketstatistics in order to determine the size,structure, depth and efficiency of thesemarkets and to assess the soundness of theinstitutional framework. On the basis of thesedata, market regulators are indirectlyinformed about financial performance and therisks facing market players, and other entities(the Bank of Estonia, ratings agencies, thepublic) are informed about potential system-wide risks. In order to assess the financialsystem as a whole, adequate financial marketstatistics are crucial. Moreover, they serveas an important tool for monetary policyanalysis (including specific aspects of liquiditymanagement).


Estonia

For purposes of monetary policy analysis andin order to monitor financial marketdevelopments, the Bank of Estonia, theMinistry of Finance, the FSA and academicinstitutions use financial market statistics. Theexact scope and purpose of the statisticsused has not been determined.


The Credit Institutions Act, which came intoforce on 1 July 1999, states that, in order toperform duties arising from the Bank ofEstonia Act (1993), the Bank of Estonia hasthe right to demand that credit institutionssubmit reports on a regular basis. Data oninterbank interest rates and currencytransactions is provided to the Bank in thiscontext.

Data on debt securities and equities isreceived from the Central Securities Register,which is obliged to register and collect suchdata in accordance with Sections 1 and 21 ofthe Estonian Register of Securities Act.



Data on interbank interest rates (theTALIBID and the TALIBOR) and foreigncurrency transactions are received via directreporting by credit institutions. The Bank ofEstonia calculates the TALIBID and theTALIBOR on the basis of the daily quotationsof a list of commercial banks made up ofthree Estonian and two foreign banks whichactively operate on the Estonian financialmarket, namely Hansapank, Eesti Ühispank,Sampo Pank (Estonia), Nordea Pank (Finland),and Svenska Handelsbanken (Sweden).

Data on the foreign currency transactionsexecuted over a period of a month arereceived from commercial banks each month.The data also include gross currency

transactions by small currency dealersoperating under licence of these banks.1

Data on short and long-term debt securitiesand equities is received from the EstonianCentral Securities Depository (ECSD). Datainclude issues and daily transactions (prices,volumes) on a security-by-security basis. Dataon major stock indices and major corporatestocks (traded on the TSE) are available onthe TSE�s website (www.hex.ee).


Interbank interest rates, i.e. the TALIBORand TALIBID, are fixed by the Bank ofEstonia every business day at 11 a.m. Estoniantime. The TALIBOR and the TALIBID arecalculated on the basis of the respectiveinterbank interest rates on loans and depositsof quoting banks. The highest and lowestquotations of the quoting banks published ontheir Reuters pages at the time of fixing aredisregarded and the arithmetic mean of thequotations is calculated. Since 8 February1999, the periods for which the TALIBIDand the TALIBOR have to be quoted are onemonth, two months, three months, sixmonths, nine months and 12 months. Thecalculation of interest rates to be quoted isbased on the actual number of days/360, andthe first day of the periods to be quoted isthe same day plus two banking days (spot).

Data on the gross foreign exchangetransactions executed over a month (brokendown by major currency) are received fromcommercial bank on a monthly basis. Themedium of data collection is electronic. Dataon debt securities, equities, the TALSE andmajor corporate stocks are available dailyfrom the ECSD and the TSE at www.hex.ee.

1 According to Bank of Estonia Decree No. 13 of 15 September1994, all currency exchange dealers must have a commercialbank licence.


Estonia


Data on interbank interest rates is collecteddaily; data on currency transactions (spot/forward) is collected monthly. Main data ondebt securities, equities and the TALSE areavailable on the websites of both the EstonianCentral Securities Depository (ECSD) andthe TSE each day.



TALIBOR and TALIBID - the highest andlowest quotations of the quoting banks atthe time of fixing are disregarded and thearithmetic mean of the quotations iscalculated.

� In the case of the monthly TALIBOR/TALIBID, the monthly average is used.

� Foreign exchange transactions arereported as the monthly turnover on agross basis.

� Data on debt securities, equities andmajor corporate stocks are available dailyon a transaction-by-transaction basis. TheTALSE index is available daily; the Paacheindex formula is used for calculations.


No major breaks in series have occurred.Should there be changes in collectionprocedures, this will be indicated.

2.3.3 Revisions

TALIBOR and TALIBID quotations arepublished daily and are not subject tosubsequent revisions.

Foreign exchange transactions - should therebe a need for revisions (for example tocorrect reporting errors), data will be revisedduring the release of data for the followingperiod and highlighted. Should they benecessary, explanations are also added.

Data on debt securities, equities and theTALSE are based on registration data anddata on transactions available in the ECSDand on the TSE and, therefore, it is veryunlikely that revisions will be necessary.

2.4 Publications


Data on the TALIBOR and TALIBID arepublished daily on the website of the BalticNews Service (www.bns.ee). Monthly dataare released on the Bank of Estonia�s website(www.ee/epbe) on the sixth banking day ofeach month.

Data on foreign exchange transactions arereleased on the Bank of Estonia�s websitemonthly on the 14th banking day.

Data on debt securities, equities and theTALSE are available daily at www.hex.ee.


Statistical data on the TALIBOR and TALIBIDas well as on foreign exchange transactionsare also included and used in the followingBank of Estonia publications:

� the Statistical Bulletin (monthly, publishedin Estonian and English);

� the Annual Report of the Bank of Estonia(published in Estonian approximately fivemonths and in English approximately sixmonths after the end of the year);

� the Monetary Developments and PolicySurvey (quarterly, published in Estonian


Estonia

and English), available in hard copy andon the Bank of Estonia�s website.

Data on debt and equity markets and on theTALSE can also be found in the quarterlypublication on the Estonian securities market,available at www.hex.ee.

2.5 Users

Data on financial markets are used by variousdepartments within the Bank of Estonia, aswell as by the Ministry of Finance, the FSAand financial and academic institutions.


3.1.1 Definitions

According to the Law on the SecuritiesMarket, a security is a share or other similartradable right; a bond, convertible bond orother tradable debt obligation issued; asubscription right or other tradable rightgranting the right to acquire securities; aninvestment fund unit; a debt obligation issuedfor a term of up to one year which is usuallytraded on the money market (money marketinstrument); a derivative instrument; and atradable depository receipt.

According to the same law, a securities issueis a complex of securities of the same type,issued on the basis of the issuer�s decisionalone. Should issuance be carried out in parts,it is considered as one issue.

The ECSD collects data on securities issues.


In general, the aim of gathering securitiesissues statistics is based on the need to havean integrated view of financing opportunitiesin the country and to assess the efficiency ofbanks� and real sector enterprises�investment and financing policies. Narroweraspects of financial stability, e.g. the use ofsecurities-based financing as an alternativeway of funding enterprises, should be closelymonitored in order to assess banks� efficiencyand competitiveness.


Unlike the situation in many other countries,the government securities market is thin inEstonia (partly due to restrictions imposedby the currency board arrangement). Arepresentative yield curve, which gives aproxy liquidity stance, can be derived frombank lending rates. Therefore, the role ofthe securities issues statistics in shapingmonetary policy is relatively insignificant. Thecentral bank is mainly interested inmonitoring developments in private sectorinstruments in the debt market and in theequity market.


As stated in the Estonian Central Register ofSecurities Act (which came into force on 1January 2001), the ECSD collects data onsecurities issues. It registers shares, debtobligations and other rights and operationsperformed with such rights.

Information concerning the name, address,registry code of the issuer, type, nominalvalue (including the currency) and amount ofsecurities is available to the public, inaccordance with Section 7 of the EstonianCentral Register of Securities Act.

The ECSD publishes information on shares,debt obligations and other rights andoperations performed with such rights on itswebsite (www.hex.ee).

The Bank of Estonia has no legal powers tocollect information on securities issues.Under agreements with the ECSD, the Bank


Estonia

of Estonia receives the data necessary for itsown purposes (analyses).



As already indicated in Sub-section 3.1.3,there is an obligation to register all shares,debt obligations and other rights andoperations performed with such rights withthe ECSD. As data in this register areavailable on the ECSD�s website, noadditional reporting is needed: registrationsof securities issues and transactions involvingthese securities can be found in the register.


Data are collected on a security-by-securitybasis. There are no commercial dataproviders supplying such information. Atpresent, the ECSD does not draw up asectoral breakdown of issuers, but as thename of each issuer is available, the users ofthe information can make any breakdownsthat are needed. Available data include issuevalues, outstanding amounts, issue dates andredemption dates. The following instrumentcategories are used at present: shares, sharesand units of investment funds, rights, units,debt securities, other.


Data are available on a daily basis atwww.hex.ee.



Data are collected daily.


Since 1998, data registered in the ECSD havebeen more detailed.

3.3.3 Revisions

As data are received directly from the ECSDdatabase and are based on actual transactionswith securities, revisions are only rarelyneeded.

3.4 Publications


Data on registered securities issues andtransactions are available at www.hex.ee ona daily basis.


Some data on registered securities issues andtransactions are also available in the quarterlyBulletin on the Estonian Securities Market,available in electronic format at www.hex.ee.Total figures for registration entries in theECSD, new debt instrument issues andreductions of share capital in the periodunder review are published in this Bulletin.

3.5 Users

Data on securities issues are used by variousdepartments of the Bank of Estonia, as wellas by the Ministry of Finance, the FSA,academic institutions and the general public.


Estonia


4.1.1 Definitions

Within the framework of off-balance-sheettransactions, statistics are gathered onderivative transactions with underlying assetssuch as currency, interest rates, share pricesand indices, commodity prices and indices aswell as other instruments.

There are the following schemes to reflectderivative transactions which belong toseveral types of underlying assets:

(i) currency - derivative transactionsinvolving more than one currency(including precious metals as well as gold,platinum, silver and palladium in unitstradable in world markets) that are notrelated to shares and commodities;

(ii) interest rates - only derivativetransactions related to the interest ratesof one or several currencies that are notrelated to shares and commodities. Thiscategory covers all fixed and/or floatinginterest rate one-currency contracts(including bond-related contracts);

(iii) shares - all share-price or index-relatedderivative transactions that are notrelated to commodities;

(iv) commodities and others - all derivativetransactions related to commodity pricesand indices as well as precious metals(except contracts reflected undercurrency), etc. that can simultaneouslybe related to some other market riskcategory.

Derivative transactions in Estonia are definedas follows:

� forward contract - a commitment to sellor purchase a specific quantity at a fixedprice on a specific future date;

� futures contract - a standardised forwardexchange-traded contract;

� swap - a contract committing the partiesto exchange payments (e.g. currency,interest rates) based on the instrumentunderlying the transaction with pre-determined conditions;

� put option - a right (not an obligation) tosell assets at a specified price and in aspecific quantity on (or before) aparticular date in the future;

� call option - a right (not an obligation) tobuy assets at a specified price and in aspecific quantity on (or before) aparticular date in the future;

� European option - an option to beexercised only on the date of expiry;

� American option - an option to beexercised before the date of expiry.

There are no significant deviations from theInternational Accounting Standards (IAS)concerning the definitions and underlyingconcept of financial derivatives in Estonia.


The main purpose of financial derivativesstatistics is to provide the Bank of Estoniawith necessary information about the hedgingactivities of Estonian and foreign economicagents.

The second purpose is to determine the size,structure and depth of the financialderivatives markets. Accurate derivativesstatistics enable analysts to assess banks�behaviour regarding not only their risk-adversity or risk-appetite, but also theirhedging strategies with respect to specificpositions. In an open economy, the increasein activity on these markets traditionally



Estonia

reflects growth in the domestic economy,but it may also signal some structuraldevelopments in the banking sector.

Other purposes of financial derivativesstatistics are to increase market transparencyand thereby to help the Bank of Estonia, aswell as other authorities and marketparticipants, to better monitor patterns ofactivity in the financial system. The statisticsare also used by the FSA for supervisorypurposes.


According to the Financial SupervisoryAuthority Act, the FSA is responsible for thesupervision of the activities provided for inthe Credit institutions Act (Section 2 of theFinancial Supervisory Authority Act).

As one of the main functions of the FSA infulfilling its objectives of financial supervisionis constantly to analyse and monitor thecompliance of entities subject to financialsupervision with the requirements regardingfinancial soundness and own funds and otherobligations set out in the Bank of EstoniaAct, the FSA has the right to collect any datanecessary for fulfilling this task, including dataon financial derivatives transactions (Section6 of the Financial Supervisory Authority Act).



Data on financial derivatives are provideddirectly to the Bank of Estonia by commercialbanks only. Financial derivatives are tradedboth OTC and on the stock exchange.However, even though investment firms alsodeal with derivatives, no statistical data havebeen collected from them so far. Nevertheless,the FSA will implement statistical reportscovering derivatives statistics of investmentfirms in the near future.


Commercial banks are obliged to report dataon prices and volumes of financial derivatives.Data are collected electronically in separatereports, with data broken down by underlyingasset.

Realised derivatives traded both on organisedmarkets and OTC are recorded on-balance-sheet on a gross basis, under remainingassets/liabilities. Unrealised derivatives arerecorded off-balance-sheet.


Data are collected on a monthly basis andhave to be delivered by the seventh bankingday following the end of the month.



Data provided on financial derivatives areend-of-period data.


The reporting system on off-balance-sheettransactions came into force in September2002. Should there be any changes to thereporting population or reporting instructions,these changes will be indicated in the statisticalreleases.

4.3.3 Revisions

The data are preliminary when first releasedand are subject to revisions in the course ofthe following month. The final data are thenpublished with the subsequent issue offinancial derivatives statistics. Changes in dataare underlined and explanation notes added,


Estonia

if necessary. The main revisions relate toreporting errors in previous periods.

4.4 Publications


Data on financial derivatives are publishedmonthly on the Bank of Estonia�s website(www.ee/epbe). The release date forderivatives statistics is the 18th banking day.

The volume of financial derivatives as a totaland separately by groups of underlying assetsis published in this monthly table.


None.

4.5 Users

Data on financial derivatives are mainly usedfor supervisory purposes by the FSA, butalso for analytical purposes by the Bank ofEstonia. Published data are also used by thegeneral public.


5.1.1 Definitions

The additional financial statements providedby the credit institutions on loans and depositsinclude some very precise and detailedinformation about interest rates. It is possibleto calculate interest rates for all available groupsand �cross-groups�, broken down by customer,maturity, currency and residency and, in thecase of loans, industry and collateral.

In the regular publications of the Bank ofEstonia, the interest rates on loans anddeposits are published separately in Estoniankroon, euro and US dollars for all majormaturity categories. Interest rates for loansdenominated in Estonian kroon and euro,broken down by the borrower�s mainindustry group, as well as for consumercredits and housing loans, are also available.

The reporting agents comprise all commercialbanks operating in Estonia. At present, theBank of Estonia collects interest rate statisticsonly on new business, not on amountsoutstanding. Data are collected on interestrates that banks charge on loans and pay ondeposits vis-à-vis non-financial corporationsand households, as well as vis-à-vis all other


sectors defined in the ESA 95, on a monthlybasis. New reporting requirements have beenintroduced for commercial banks in orderalso to receive data on amounts outstanding.Data will be received as from April 2003. Allthe data necessary for the compilation of interestrates statistics according to ECB RegulationECB/2001/18 will then be available.

Although the MFI sector comprises elevensavings and loan associations, in addition toseven banks, interest rate statistics are notyet collected from savings and loan associations.


The broad spectrum of interest rates isessential for analysing and monitoring bothmonetary developments and the developmentof the real sector in Estonia. Foreign interestrates are also regular components of theanalysis. Interest rate statistics (plusinformation on credit and lending aggregates,etc.) are used to analyse monetary policytransmission. In that respect, the transmissionof European money market rates to domesticretail interest rates affecting domesticdemand is a crucial element of policydiscussions.


Estonia

Interest rate statistics are also needed toassess financial sector-related stability issues.


The Credit Institutions Act, which came intoforce on 1 July 1999, states that, in order toperform duties arising from the Bank ofEstonia Act of 1993, the Bank of Estonia hasthe right to demand that credit institutionssubmit reports on a regular basis. However,in order to minimise the burden of reportingagents, the data from credit institutions areactually collected by the FSA2 and aresubsequently shared with the Bank of Estoniathrough a common database. The legal powerof the FSA to obtain data from creditinstitutions is determined by the CreditInstitutions Act and the Bank of Estonia�sDecrees. According to Section 48, Article 2,of the Financial Supervisory Authority Actand Section 2, Article 5, of the Law on theCentral Bank of Estonia, the FSA is requiredto provide the Bank of Estonia withinformation necessary for the performanceof its functions.

MFI interest rate statistics are compiled andpublished by the Bank of Estonia.



In the case of credit institutions, the censusmethod is used, i.e. all credit institutionsresident in Estonia report interest ratestatistics. Coverage of their business volumeis 100% of their total balance sheet.However, eleven savings and loanassociations operating in Estonia, which arealso included in the list of MFIs and accountfor 0.1% of the total balance sheet of MFIs,do not currently report interest ratestatistics.


The reporting population consists of sevenresident credit institutions currentlyoperating in Estonia. As mentioned above,the census approach has been adopted toselect the reporting agents. At present, onlyinterest rates on new business are detailed.The new business interest rate reflects theinterest rate applied to deposits and loans inthe relevant instrument category in relationto new agreements concluded betweenclients and reporting agents in the referenceperiod.

Data is collected electronically via e-mail.


Data collection systems for interest rateshave existed since 1997. The country-by-country residency principle was introducedat the beginning of 2001.

Data are collected monthly for each calendarmonth, and must be delivered by the end ofthe fifth banking day of the following monthat the latest.



The reporting agents report data on volumesof deposits placed and loans made over onemonth, together with corresponding interestrates. Data are end-of-period data.

2 According to Section 4 of the Financial Supervisory AuthorityAct, the FSA is an autonomous agency with a separate budget,which operates at the Bank of Estonia and conducts financialsupervision on behalf of the state.


Estonia


Data on interest rates were available before1997, but were not very detailed. In 1997, amore detailed reporting system wasintroduced and the country-by-countryresidency principle was included in 2001. Inthe event of there being major changes toreporting instructions/collection systems orreporting agents, such changes are usuallyindicated in the statistical publications.

5.3.3 Revisions

The data are preliminary when first releasedand are revised the following month. Thefinal data are then published with thesubsequent issue of interest rate statistics.Changes in data are highlighted andexplanatory notes added, if necessary.However, most revisions involve correctingthe reporting errors of previous periods.

5.4 Publications


The Bank of Estonia publishes interest ratestatistics on its website (www.ee/epbe) eachmonth. The release date for such statistics isthe 17th banking day of the subsequentmonth. The following are also published:interest rates on loans by customer group(general government, financial institutions,commercial undertakings, individuals) andmaturity band (short-term: up to threemonths, three to six months and six totwelve months; long-term: one to five years,five to ten years, over ten years), interestrates on loans in Estonian kroon, euro andUS dollars by different maturity bands,interest rates on loans by different industrygroups and rates of consumption and housingloans to households. Deposit interest ratesare presented by customer group (generalgovernment, financial institutions, commercialundertakings, individuals) and maturity band(up to three months, three to six months,

six to twelve months, over one year) andinterest rates on EEK, EUR and USD depositsare given as well.


Statistical data on interest rates are alsoincluded and used in the following Bank ofEstonia publications:

� the bulletin entitled �Selected Statistics�(monthly, published in Estonian andEnglish);

� the Annual Report of the Bank of Estonia(published in Estonian approximately fivemonths and in English approximately sixmonths after the end of the year);

� the Monetary Developments and PolicySurvey (quarterly, published in Estonianand English), available in hard copy andon the Bank of Estonia�s website.

5.5 Users

In principle, the Bank of Estonia uses MFIinterest rate data for financial stability andmonetary analysis, as well as for economicresearch. The main external users areanalysts of credit institutions, governmentministries and universities. Another regularuser is the State Statistical Office, whichneeds the data in order to calculate thebanks� Financial Intermediation ServicesIndirectly Measured (FISIM). Interest ratedata are supplied to internationalorganisations such as the InternationalMonetary Fund, Eurostat and the EuropeanCentral Bank.


Estonia

6 Contacts at the Bank of Estonia


Liina SeestrandtFinancial Stability Department - FinancialSector Statistics DivisionPhone: (+372) 6 680642Fax: (+372) 6 680943e-mail: [email protected]


Estonia

Hungary


Hungary


APEH Hungarian Tax and Financial Control Administration - Adó- és PénzügyiElleno“rzési Hivatal

APRC annual percentage rate of change

APV Hungarian Privatisation and State Holding Company - Állami Privatizációs ésVagyonkezelo“ Rt.

BAMOSZ Association of Fund Management Companies in Hungary - BefektetésiAlapkezelo“k Magyarországi Szövetsége

BCE Budapest Commodity Exchange

BIS Bank for International Settlements

b.o.p. balance of payments

BSE Budapest Stock Exchange

BUBOR Budapest interbank offer rate - Budapesti Bankközi Forint Hitelkamatláb



GDMA Government Debt Management Agency Ltd. - Államadósság Kezelo“ Központ Rt.

HST Hungarian State Treasury - Magyar Államkincstár Rt.

HUF Hungarian forint



ISO International Organization for Standardization

KELER Central Clearing House and Depository Ltd. - Központi Elszámolóház ésÉrtéktár Rt.


NBH bills three-month zero-coupon securities issued by the National Bank of Hungary

OECD Organisation for Economic Co-operation and Development



Hungary


PSZAF Hungarian Financial Supervisory Authority - Pénzügyi Szervezetek ÁllamiFelügyelete

SNA1993 System of National Accounts 1993


Hungary


1.1.1 Introduction

Statistics on other financial intermediaries(OFIs) relate to balance sheet reports,published on a monthly basis, for two sub-sectors, namely investment funds (S123) andinsurance corporations (S125).

1.1.2 Definitions

An investment fund is defined as a volume ofassets held by a legal entity, created andoperated through the public or private issueof investment shares, and managed by theinvestment fund manager on the basis of thepayment of a general commission by and tothe benefit of investors. The net value ofassets of an investment fund is the marketvalue of the assets constituting the portfolioof an investment fund less the fund�s totalliabilities, including accrued liabilities.

In addition to investment funds, this sub-sector encompasses financial intermediarieswho do not accept deposits; their primarybusiness is to raise large amounts of capitalfor the purpose of acquiring assets in themoney and capital markets. Such intermediariesinclude financial institutions (leasingcompanies and other finance houses whosemain activity is to provide loans), investmentcompanies (which invest or deal in securities),venture capital firms and investment fundmanagers. All of these companies are obligedby law to obtain the necessary authorisationfrom the Hungarian Financial SupervisoryAuthority and/or the National Bank ofHungary in order to pursue their activities.

Financial institutions are regulated by thesame act as banks, since both types of entitybelong to the category of credit institutions.The main difference between the two lies intheir activities; financial institutions cannotcollect deposits or issue instruments whichcan be used instead of cash payments.

Investment firms are regulated by the Act onCapital Markets. The main activity of theseinstitutions is to invest or trade in securitiesfor their own account.

Investment fund managers are regulated bythe Act on Capital Markets. These companiesare responsible for managing andrepresenting investment funds.


Based on the monthly data reported byinvestment funds, a number of in-houseanalyses (e.g. financial accounts andhousehold savings) and publications aredrafted. The monthly statistical balancesheets of insurance corporations serve asbackground material for these in-houseanalyses.


In addition to performing its central banksupervisory activity and other functions, theNational Bank of Hungary requires specificinformation to assess financial developmentsin order to draft and evaluate monetarypolicy. When the Bank needs informationfrom business organisations which are notrequired to report data under the provisionsof the Central Bank Act, the data is gatheredthrough the National Statistical DataCollection Programme, as provided for underthe Statistics Act. Reporting agents areobliged to report any data requested underthe provisions of Government Decree 198/2001 (X.19).

As an institution belonging to the officialstatistical system, the National Bank ofHungary has the authority to ask to see allbalance sheets and profit and loss accountsthat are disclosed for tax purposes to theHungarian Tax and Financial ControlAdministration (APEH).



Hungary



All investment fund managers are requiredto report data relating to the balance sheetsof investment funds. Each fund is reportedseparately. Altogether there are 22 fundmanagers reporting the balance sheets of 106investment funds on a monthly basis,providing a retrospective breakdown by day.

All 25 insurance corporations reportstatistical balance sheet data on a monthlybasis.

The data received from the APEH consists ofsimplified balance sheets and profit and lossaccounts, and covers all OFIs exceptinvestment funds.


Only stock data have to be reported.

The balance sheet of investment funds dividesasset items into five main categories:

� assets from residents (S1);

� assets from non-residents (S2);

� part payments pending in respect ofsecurities sold;

� other assets not reported under otheritems; and

� non-financial assets.

Liabilities are listed under the following fivemain headings:

� equity (i.e. the net asset value of theinvestment shares, which is broken downfor purposes of the report into liabilitiesto residents (S1) and liabilities to non-residents (S2); in terms of the sectoralbreakdown, the Bank only requires

households (S14) and other monetaryinstitutions (S122) within the �residents�category to be treated individually, whileall other sectors are covered together inone category);

� credit;

� liabilities from derivatives transactions;

� part payments pending in respect ofsecurities purchased; and

� other liabilities not reported under otheritems

The assets within the statistical balance sheetsof insurance corporations are listed under fourmain categories:

� assets from residents (S1);

� assets from non-residents (S2);

� other financial assets; and

� non-financial assets.

The data within the main categories arebroken down by sector and expressed inHungarian forints, foreign currency and totalterms.

Liabilities within the statistical balance sheetare listed under six main categories in aconsolidated form:

� equity;

� subordinated loan capital;

� provisions;

� insurance technical reserves;

� reinsurers� deposits; and

� other liabilities.


Hungary

1.2.3 Time range, frequency and timelinessof reporting

The balance sheets of both investment fundsand insurance corporations are drawn upmonthly and refer to the final day of themonth.

In the case of investment fund balance sheets,the submission deadline is the fifth workingday following the month under review, whilethe deadline for insurance corporations isthe 15th working day. Data must besubmitted in electronic format, i.e. on afloppy disk.

The balance sheets and profit and lossaccounts received from the APEH arecollected annually and passed on to theNational Bank of Hungary within 15-17months (8-9 months for preliminary data).



There is no formal policy for handling breaksin series, but the usual practice is torecalculate time series as long as possible. Ifnot, breaks are marked and explained infootnotes to the published tables and in themethodological description.

1.3.2 Revisions

There is no formal revision policy, but theusual practice is for the stock data reportedby the agents to be entered in the Bank�sprocessing system which checks forconsistency within the report and forcompliance with the rules. The series ismonitored to detect outliers which appearto be unjustified. If necessary, the Bank willask a reporting agent to correct any errorsdiscovered. If a data error discovered by thereporting agent is reported late, i.e. afterprocessing or publication, revision will takeplace in the next regular publication.

1.4 Publications


Balance sheet data concerning investmentfunds are published monthly. The three tableslisted below are published on the NationalBank of Hungary�s website on the 13th dayof the second month following the reportingmonth (or the next business day if the 13thday is not a business day):

� end-of-month net asset value ofinvestment funds;

� daily net asset value of open-endinvestment funds; and

� end-of-month net asset value ofinvestment funds with a sector-by-sectorbreakdown.

The balance sheets of insurance corporationsare used to compile financial accounts, butthey are not published separately.


In addition to the time series published onthe website of the National Bank of Hungary,the monthly reports also include thefollowing tables:

� end-of-month net asset value of investmentfunds; and

� end-of-month net asset value of investmentfunds in a sectoral breakdown.

1.5 Users

Users of OFI statistical data include thefollowing:

� the National Bank of Hungary;

� international institutions;

� investment fund managers, the


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Association of Fund ManagementCompanies in Hungary (BAMOSZ); and

� other users: the press, researchers, etc.


2.1.1 Definitions

The reporting of financial market statisticsconcerns the collection of data on interbankforint loans and deposits, as well as onforeign exchange market transactions andstatistics relating to securities holdings.

Debt markets:

(i) Money markets

Interbank interest rate statistics relate todata on all interbank financial markettransactions concluded in forints on a particularday, including the contract amount, the rateof interest and the closing date of thetransaction.

Zero-coupon securities issued by the centralgovernment (Treasury bills) and the NationalBank of Hungary (NBH bills) play a significantrole in the market for short-term debtsecurities; the role of instruments issued byother sectors is negligible. The followinginstruments are covered by statistics onsecurities holdings:

Treasury bills:

� Discount Treasury bills are governmentsecurities with a maturity of less thanone year. No interest is paid on thesesecurities. Instead, they are issued at adiscount (i.e. at a price lower than thenominal value of the security) and thenominal value is paid on the redemptiondate. Currently, discount Treasury billsare issued for three benchmark maturities,namely three, six and 12 months.However, due to an active secondarymarket, these securities, with almost any

residual maturity of up to one year, arealso available on the secondary market.

� Interest-bearing Treasury bills are fixed-rate government securities in dematerialisedform, with a maturity of one year. Theminimum denomination is HUF 10,000.Interest is paid to investors uponmaturity, together with the principal.

� Treasury savings bills are available withmaturities of one and two years. Thesebills are fixed, �step-up� rate securitieswhich may be redeemed at any time priorto their maturity date. Upon redemption,the holder of the securities receives afixed amount of interest based on thetime elapsed since the day of purchase.(In statistics on securities holdings, two-year maturity Treasury savings bills areclassified as Treasury bills.)

NBH bills are three-month zero-couponsecurities.

(ii) Capital market

The long-term bond market is representedby bonds issued by �non-financial corporations�(S11), �other monetary financial institutions�(S122), �central government� (S1311) and�local governments� (S1313). Statistics onsecurities holdings are collected for all bondsdeposited with reporting institutions. Atpresent, the National Bank of Hungarypublishes data on bonds denominated inHungarian forints and issued by centralgovernment. Bonds issued by other sectorsrepresent a relatively small proportion of thebond market in Hungary.

� Government bonds: Hungarian Governmentbonds are interest-bearing governmentsecurities with maturities in excess ofone year.



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� Treasury savings bonds are governmentsecurities to which a step-up rate applies,i.e. the rate of interest increases on amonthly basis in proportion to the timeelapsed since the date of subscription. Inthe case of a step-up rate, the annualinterest corresponding to the holdingperiod will apply to the lifetime of thesecurity, (from the issue date to theredemption date). This instrument is inbearer form and it has a maturity ofthree years, although it can be redeemedbefore maturity.

Asset markets:

(i) Equities markets

The main stock indices calculated by theBudapest Stock Exchange (BSE) are theBudapest Stock Index (BUX), the EquityInvestment Fund Portfolio Index (RAX), theCentral European Stock Index (CESI) andthe Central European Blue Chip Index(CETOP20).

Statistics on securities holdings are collectedfor all equity-type securities deposited withreporting institutions. At present, theNational Bank of Hungary only publishes dataon shares listed on the BSE and oninvestment fund certificates. Data on sharestraded on the over-the-counter (OTC) markethave been collected, but have not as yetbeen published.

The five major share listings on the BSE atthe end of 2002 are shown in the tablebelow.

Table 1The five major share listings on the BSE at year-end 2002

ISIN* Company Sector EUR millions Percentage of total capitalisation

HU0000016522 Matáv S11 3,603 29HU0000010517 MOL S11 2,188 18HU0000061726 OTP S122 2,623 21HU0000010459 Richter S11 1,173 9HU0000053947 Egis S11 459 4

Total 10,045 80Total capitalisation of the BSE 12,493 100

* International Securities Identification Number (ISIN).

Investment fund certificates are transferablesecurities issued in a series on behalf of aninvestment fund (credited or debited to it),in a specified manner and format, andrepresenting an asset type and other rights.

(ii) Foreign exchange market

For purposes of foreign exchange statistics,data are collected daily for OTC and foreignexchange transactions concluded by creditinstitutions. A report is compiled indicatingthe nominal amount of foreign currencypurchased and sold. The followingtransactions are covered:

� spot transactions (spot foreign exchangetransactions concluded on the OTCmarket, involving the buying and sellingof foreign currency);

� option contracts (data are collected onforeign currency call and put optionsonly. Options give the holder the rightand the writer the obligation to trade acertain amount of foreign currency at apredetermined price on or until a givendate);

� forward contracts (agreements concludedon the OTC market that oblige theparties concerned to exchange given


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quantities of currencies at a predeterminedprice on a specified future date);

� futures (currency �buy and sell� contractsconcluded on the BSE at a pre-determined price and on a specified dateunder conditions governed by BSEregulations); and

� currency swaps (exchanges of specifiedamounts of two different currencies withsubsequent repayments, including bothinterest and repayment flows, over timeand in accordance with predeterminedrules).

(iii) Commodity market

The National Bank of Hungary does notcollect statistical information on thecommodity market.

The Budapest Commodity Exchange (BCE)has two sections for commodities: the �grain�section (which covers corn futures, wheatfutures, feed wheat futures, feed barleyfutures, sunflower seed futures, soybean mealfutures, rape seed futures, 34% granulatedammonium nitrate futures, cash-settled feedindex futures, corn option contracts, wheatoption contracts, sunflower seed options)and the �livestock� section (with twodifferent live hog futures). (For informationon the financial section of the BCE, seeSection 4.)


The role of financial market statistics is tohelp assess the forint interbank market andprovide market players with information onthe rate of interest applicable to interbanklending transactions.

The role of the collection of statistical dataon foreign exchange market transactions is:

� to offer the decision-makers and analystsof the National Bank of Hungary up-to-

date data on developments in the foreignexchange market;

� to provide market participants withinformation by publishing data; and

� to report on data to facilitate thecompilation of international statistics.


The National Bank of Hungary has the rightto collect statistical data, as provided forunder Act LVIII of 2001 on the NationalBank of Hungary.

Article 4 of the Act provides for thefollowing: �In order to undertake its tasks,the National Bank of Hungary shall collectand publish the necessary statisticalinformation�. Furthermore, Article 60 statesthat, within the established legal framework,the National Bank of Hungary may issueregulations which are binding on financialinstitutions, legal entities not qualified asfinancial institutions but which provideauxiliary financial services, investmentservices providers and clearing houses asreferred to in central bank decrees. Suchregulations shall govern the scope ofinformation to be provided for theperformance of the authority�s tasks andstatistical duties, and the methods anddeadlines for data submission.

The President of the National Bank ofHungary therefore has the statutory right todesignate the scope of data to be collected,in the form of an annual central bank decree.



Interbank interest rate statistics concern allbanks and specialised credit institutions whichare required to report statistical data. The


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reporting agents are the same as those listedin Table 4.

The agents reporting foreign exchangemarket statistics on a daily basis are thosecredit institutions.

Reporting requirements apply to spot andforward currency swap transactions concludedon the foreign exchange and the OTC market.

For the most important sources of data onstatistics on securities holdings, see Section3 and Sub-section 2.1.


For interbank forint loans, reporting agentsmust specify the contract amount, the appliednominal interest rate, the maturity and thetype of transaction (loan or deposit) concludedunder market terms on any particular day.This reporting requirement also applies toboth collateralised and uncollateralisedinterbank transactions, but publishedstatistics contain data only on uncollateralisedinterbank lending.

The terms to maturity published are as follows:

� overnight;

� two weeks;

� one month;

� three months; and

� six months.

Foreign exchange market statistical reportinginvolves the daily collection of data, includingthe following information:

� the transaction date;

� the value date;

� the type of transaction (spots, spot swaps,forward swaps, swap maturities, forwards,forward maturities, call options, putoptions);

� the ISO code of currency purchased;

� the amount purchased;

� the ISO code of currency sold;

� the amount sold;

� the maturity (less than one year, morethan one year);

� the counterparty (resident/non-resident,bank/other);

� OTC/exchange.

In the case of statistics on securities holdings,end-of-period stock data are collected on asecurity-by-security basis for debt instruments(based on their nominal value in the issuingcurrency) and on a unit basis for equity-typesecurities.

Table 2Reporting coverage on financial market statistics in Hungary

Credit institutions Number of institutions Of which: reporting agents(31 December 2002)

Banks 30 27Specialised credit institutions 8 3Co-operative credit institutions:

Savings co-operatives 183 -Credit co-operatives 6 -


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The data must be sent in electronic formatby GiroXmail.

Stocks are published at market value, whichis calculated by individual security as the end-of-month stocks of securities, multiplied bythe market price (see Section 3 and Sub-section 2.2 for further detail).


Banks and specialised credit institutions mustreport data on the interbank rates applicableto forint loans and forint deposits on a dailybasis. The reporting deadline is 10 a.m. onthe next business day after the transaction.

Special reporting requirements apply tointerest rates on overnight interbank loansand deposits denominated in forints.Reporting is also daily, but the deadline inthis case is 5 p.m. on the transaction day.

Credit institutions are required to submitdata on their foreign exchange marketturnover on a daily basis. The reportingdeadline is 11.30 a.m. on the next businessday after the transaction. The data mustcover the deals concluded on the day underreview in a transaction-by-transactionbreakdown.

Without exception, data must be sent inelectronic format, using the interbankpayment system.

Reporting agents must report data onsecurities holdings on a quarterly basis, thedeadline being the tenth working dayfollowing the end of the quarter. In the caseof the Central Clearing House andDepository (Budapest) Ltd. (KELER), theHungarian State Treasury (HST) and theNational Bank of Hungary, the reportingdeadline is the third working day after thereference period.



The interbank rates published by the NationalBank of Hungary are weighted by theturnover of the month under review.

Credit institutions� turnover on the foreignexchange market is reported on atransaction-by-transaction basis, in nominalterms and in US dollars, unless otherwiseindicated in the report. Turnover figures aretranslated into US dollar terms at theNational Bank of Hungary�s official middlerate of exchange. Turnover data, releasedquarterly, contain average daily turnoverfigures with the dual reporting effecteliminated, and use the Bank�s average officialmiddle rate of exchange.

End-of-period data are collected in statisticson securities holdings.


Reporting coverage of interbank rates ofinterest and foreign exchange marketturnover is continuous.

There has been one break in the data seriesof statistics on securities holdings because,since May 2001, the National Bank ofHungary has applied the sectoral breakdownof the ESA 95 to all of its statistics (see Sub-section 3.2 for further detail).

2.3.3 Revisions

There is no clear revision policy. The methodused is as follows: the National Bank ofHungary examines the data upon theirarrival, using special software designed toreveal discrepancies among reporting tables.Should an error be detected, the NationalBank of Hungary asks the reporting creditinstitution to correct the data. If the


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corrected version arrives only after theoriginal data have been processed for analysisor publication, the incorrect information isreplaced at the time of the next data release.

2.4 Publications


Average interbank rates of interest on theforint market are published on the datesspecified in the calendar of statistical releases.The press release on interest rates is postedon the National Bank of Hungary�s website(www.mnb.hu) on the second day of thesecond month following the month underreview. If that day is not a business day, thedata are released on the next business day.

Data on the foreign exchange marketturnover of credit institutions are publishedon the National Bank of Hungary�s websiteon a quarterly basis, on the 15th day of themonth following the quarter under review. Ifthat day is not a business day, publicationwill take place on the next business day. Thepublished data represent the daily averageturnover on the OTC market during aparticular quarter, broken down by type oftransaction, counterparty and currency pair.

Data on the distribution of securities holdingsby sector are published on the website ofthe National Bank of Hungary on the datesspecified in the calendar of statistical releases.

They are also published in the MonthlyReport of the National Bank of Hungary.

Data on the commodity market are publishedin the Official Hungarian Daily Gazette�Magyar Tökepiac�. The BCE also publishesstatistics on its website.


None.

2.5 Users

Users of the data including the following:


� the International Monetary Fund (IMF);

� the Organisation for Economic Co-operation and Development (OECD);

� Eurostat;

� the European Central Bank (ECB);

� the Bank for International Settlements (BIS);

� the Hungarian Financial SupervisoryAuthority (PSZAF); and

� other users: the press, credit institutions,analysts, etc.


3.1.1 Definitions

Securities issues statistics in the specific formdefined and structured in ECB RegulationECB/2000/13 are not compiled in Hungary.

The securities statistics compiled by theNational Bank of Hungary (more precisely,the statistics on securities holdings) comprise


end-of-quarter stock data on securities atmarket value. They also show thecomponents of changes in stocks at marketvalue (transactions, revaluations and othervolume changes). The outputs of securitiesstatistics are broken down by sector, inaccordance with the ESA 95. These dataserve as inputs for sector statistics to compilefinancial accounts. At present, thecompilation of stock figures includes shareslisted on the BSE, investment fund shares,


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and debt securities denominated inHungarian forints and issued by the centralgovernment and the central bank. Thecompilation of flow figures (components ofchanges in stocks) is currently limited toshares listed on the BSE. Data are collectedon all securities issued in series depositedwith reporting institutions. In the case ofstatistics on securities holdings, data on debtinstruments at nominal value (in the issuingcurrency) are collected security-by-security,while those on equity-type securities arecollected in pieces.

For more information about the statistics onsecurities holdings (distribution of securitiesholdings by sector) compiled and publishedby the National Bank of Hungary, see Section2.

Information relating to the primary issuance,redemption or amounts outstanding ofgovernment securities is published by theGovernment Debt Management Agency(GDMA). The GDMA publishes the figuresin its quarterly and monthly reports on thegovernment securities market.


The objective of collecting statistical data onstocks of securities held by different sectorsis to:

� provide inputs for other statisticscompiled by the National Bank ofHungary (e.g. financial accounts, balanceof payments (b.o.p.); and to

� provide decision-makers and analysts atthe National Bank of Hungary withinformation on developments in thefinancial and capital markets.


The National Bank of Hungary has the rightto collect statistical data, as provided for

under Act LVIII of 2001 on the National Bankof Hungary.

Article 4 of the Act provides for thefollowing: �In order to undertake its tasks,the National Bank of Hungary shall collectand publish the necessary statisticalinformation�. Furthermore, Article 60 statesthat within the established legal framework,the National Bank of Hungary may issueregulations which are binding on financialinstitutions, legal entities not qualified asfinancial institutions but which provideauxiliary financial services, investment serviceproviders and clearing houses, as referred toin central bank decrees. These regulationsshall govern the scope of information to beprovided for the performance of the NationalBank of Hungary�s tasks and statistical duties,and the methods and deadlines for datasubmission.

The President of the National Bank ofHungary therefore has the statutory right todesignate the scope of data to be collected,in the form of an annual central bank decree.



The most important sources of statisticaldata on securities holdings are reports bybanks (including the National Bank ofHungary), specialised credit institutions,investment enterprises and the branch officenetwork of the State Treasury (on their ownsecurities and on the sectoral breakdown ofsecurities deposited with them). Data on itsown securities deposits reported by theKELER and data on deposits of securitiesoutstanding deposits reported by the GDMAprovide supplementary information.

Sometimes a considerable number of sharesquoted on the exchange are not deposited,so that reports by exchange-traded companiesand, in the case of a few firms, informationcollected about strategic owners are also used.


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Table 3Reporting coverage of securities issues statistics in Hungary

Reporting agents Number of institutions Of which: Percentage of total(31 December 2002) reporting institutions

Central banks 1 1 100Banks 3 0 3 0 100Specialised credit institutions 8 8 100Investment firms 26 26 100Clearing houses 1 1 100Hungarian State Treasury 1 1 100


For statistics on securities holdings, data ondebt instruments at nominal value (in theissuing currency) are collected security bysecurity, while those on equity-type securitiesare collected in pieces.

Data records are structured as follows.

In all the tables, the following fields precedethe data content fields:

� the general identification fields identifythe report, reporting agents, date, tablenumber, and record number;

� the specific identification fields identifythe securities and the unit of measureused for the data content (it can be anISO currency code or a code for�pieces�).

Data content fields:

There are five reporting tables.

In the two main tables, the agents report thefollowing data:

� securities owned by them and the sectoralbreakdown of securities deposited withthem (stocks of securities owned andissued by the issuer appear separately inthe report); and

� the country of domicile of the securitiesholder.

Two of the three supplementary tablesconcern depositing among reporting agentsin order to eliminate duplication and toensure the possibility of checking thereported stocks against the stocks on theaccounts of the reporting agents.

One supplementary table contains securitydescription data relating to securities withoutISINs.

According to Act CXX of 2001 on theCapital Market, publicly issued securities haveto be dematerialised. The materialisation ofa dematerialised security is not permitted.

In Hungary, the KELER has the role of thenational numbering agency. The owners ofthe KELER are the National Bank of Hungary(50%), the BCE (25%) and the BSE (25%),although the KELER is not an integral part ofthe National Bank of Hungary. The KELERreports the full list of ISINs and securitiesdescription information to the National Bankof Hungary on a weekly basis. ISINs areunique codes used to identify data collectedfor individual securities.

The basis of the sector classification is theESA 95. Published data is broken down bysectors, as follows:

� non-financial corporations (S11);

� financial corporations (S12):


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� National Bank of Hungary (S121),

� other monetary financial institutions(S122),

� other financial intermediaries (S123),

� financial auxiliaries (S124) and

� insurance corporations and pensionfunds (S125);

� general government (S13):

� central government (S1311),

� local government (S1313) and

� social security funds (S1314);

� households (S14);

� non-profit institutions serving households(S15);

� rest of the world (S2).

Data must be sent in electronic format byGiroXmail.

Securities are broken down into the followingtypes:

� government bonds;

� NBH bills;

� Treasury bills;

� shares listed on the BSE; and

� investment fund shares.

Valuation and coverage

Stocks are published at market value, whichis calculated as the end-of-month stocks ofsecurities by individual security multiplied bythe market price. The market price ofpublicly issued government securities is either

the OTC price at the end of the period, thestock exchange market price, or the pricequoted by the HST, in a priority orderaccording to the listing. In the case ofprivately issued government bonds, the priceis estimated because their market turnoveris accidental. However, the price of fixed-rate securities is calculated on the basis ofthe zero-coupon yield curve estimated bythe National Bank of Hungary, while the netprice in the case of variable-rate securities istaken as 100%, increased by interest accruingon the bond. Holdings of securitiesrepurchased by the HST cannot beconsidered as securities outstanding in themarket. Securities handled by the HungarianPrivatisation and State Holding Company(APV) are not taken to be securitiesoutstanding in the market either. From astatistical point of view, APV is treated as asub-sector of central government, so thatthis stock is recorded on a consolidated basis.

The published data relating to shares listedon the BSE are indicated at market value atthe end of the period (i.e. at closing prices).The stock data include the total amount ofall of securities traded on the BSE, so thatthey also include any part of sets of securitiesthat has already been issued but notintroduced temporarily on the exchange (e.g.due to the fact that the introduction is time-consuming). Therefore, the stocksrepresented here may deviate slightly fromthose introduced on the BSE.


Reporting agents must report data onsecurities holdings on a quarterly basis. Thereporting deadline is the tenth working dayfollowing the end of the quarter. In the caseof the KELER, the HST and the NationalBank of Hungary, the reporting deadline isthe third working day after the referenceperiod.


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End-of-period data are collected in statisticson securities holdings.

The main quality checks concern the following:

� the comparison between the securitiesholdings aggregated output data of sectorsand data of statistical balance sheets ofsectors (comparison is made by types ofsecurities);

� the comparison between the total issuedamount and reported data of securitiesholdings statistics (comparison is madeon security by security basis); and

� the evaluation of monthly changes ofstocks on the basis of a �reporting agent- instrument - holding sector� matrix.


There is one break in the data series ofstatistics on securities holdings because, sinceMay 2001, the National Bank of Hungary hasapplied the sectoral breakdown of the ESA95 to all of its statistics.

The contents of part of the newly introducedsectors are identical to those of the sectorsused previously. A more detailed breakdownof the �other general government� sectorinto �central government� (S1311) and�social security funds� (S1314) constitutes amajor change. �Other financial corporations�have been divided into the �other financialintermediaries� (S123) and �financialauxiliaries� (S124) sub-sectors. Investmentfunds, previously shown as a separate sector,have been regrouped into the �other financialintermediaries sector� (S123). Unincorporatedenterprises have been reclassified from the�household sector� (S14) into �non-financialcorporations� (S11).

Owing to these changes, the data series usingthe old sector breakdown ends with the secondquarter of 2001 and a new data series based onthe new sector breakdown starts from thesame quarter.

3.3.3 Revisions

There is no clear and uniform revision policy.The method used is as follows: the NationalBank of Hungary examines the data upontheir arrival using special software designedto reveal discrepancies among reportingtables. The quality checks mentioned in Sub-section 3.3.1 are also made. Should an errorbe detected, the National Bank of Hungaryasks the reporting agent to correct the data.If the corrected version arrives only afterthe original data have been processed foranalysis or publication, the incorrect informationis replaced at the time of the next data release.

3.4 Publications


The data on the distribution of securitiesholdings by sector are published on the websiteof the National Bank of Hungary on datesspecified in the calendar of statistical releases.They are also published in the Monthly Reportof the National Bank of Hungary.


Data also appears within the framework ofsector-related statistics, which are based oninformation taken from securities statistics(net lending of households, b.o.p., etc.).

3.5 Users

Users of the data include the following:

� the National Bank of Hungary; and

� other users: the press, credit institutions,analysts, etc.


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4.1.1 Definitions

On account of the sector statistics (monetary,b.o.p. and government statistics), the NationalBank of Hungary needs different informationon financial derivatives. It collects publisheddata on derivatives from the exchanges,obtaining data on foreign exchange futuresfrom the BCE and data on foreign exchangefutures, share futures and options from theBSE. The National Bank of Hungary does notrepublish these data in separate financialderivatives statistics.

Credit institutions also provide data on theforeign exchange market. Information onforeign exchange derivatives provided bycredit institutions can be found in Section 2.

The National Bank of Hungary participatesin the conduct of a triennial survey organisedby the BIS to assess foreign exchange marketsand OTC derivatives markets.

The accepted international definitions ofcommon financial derivatives (forwardcontracts, futures, options and swaps) areused in financial terminology in Hungary.Deviations are not deemed to be significant.


The objective of collecting statistical data onfinancial derivatives is to provide decision-makers and analysts of the National Bank ofHungary with information on developmentsin the financial and capital markets.


The National Bank of Hungary has the rightto collect statistical data, as provided for


under Act LVIII of 2001 on the NationalBank of Hungary.

Article 4 of the Act provides that �In orderto undertake its tasks, the National Bank ofHungary shall collect and publish the necessarystatistical information�. Furthermore, Article60 states that within the established legalframework, in the form of central bankdecrees, the National Bank of Hungary mayissue regulations which are binding on financialinstitutions, investment service providers andclearing houses, as well as legal entities notqualified as financial institutions but whichprovide auxiliary financial services. Theseregulations define the methods and deadlinesfor data submission and the scope ofinformation to be provided for the performanceof the National Bank of Hungary�s statisticalduties, and its tasks as a monetary authority.

In addition, the National Bank of Hungaryhas a contract with an official data vendor ofthe BSE and the BCE.



Data from the exchanges are provided byone of the aforementioned exchanges� datavendors.

The KELER provides detailed data (brokendown by residents/non-residents and buying/selling) on share futures and options tradedon the BSE.

Credit institutions also provide data on foreignexchange market operations, on the OTCmarket, and on the exchanges (see Section 5).


Foreign exchange futures contracts (USD,JPY, CZK, GBP and CHF futures, one-week


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USD futures, one-week EUR futures and one-week JPY futures) on the BCE.

The BSE derivatives market includes bothfutures and options products. The productstraded in the equity and index-basedtransaction category include index and equityfutures and options contracts; the foreignexchange transaction category currentlycontains 4 foreign exchange contracts (EUR,CHF, GBP and USD), while the interest-based transaction class lists three and 12-month discount Treasury bills, one and three-month BUBORs and three-year Hungariangovernment bond contracts for trading.

Data collected (both from the BCE and theBSE) are as follows:

� daily turnover (contracts);

� open interest; and

� prices (bid, ask, settlement).

Data are collected in electronic format.


The daily statistics mentioned above areavailable until 8 a.m. on the next businessday.



Daily (end-of-period) data collected (fromboth the BCE and the BSE) are as follows:

� daily turnover:

� contracts and

� market value;

� open interest:

� contracts and

� market value;

� prices:

� maximum bid,

� minimum bid,

� maximum ask,

� minimum ask and

� settlement.

4.3.2. Breaks in series

Not applicable - the National Bank ofHungary does not revise the data.

4.4 Publications

The National Bank of Hungary does notrepublish financial derivatives statistics,although the exchanges publish them in�Magyar Tökepiac�, the official Hungariandaily gazette. The BSE also publishes statisticsin its monthly and yearly reports and theBCE publishes statistics on its website.

4.5 Users

Different departments of the National Bankof Hungary (Statistics, Monetary Policy,Economics, Banking) use the data.


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5.1.1 Definitions

In order to compile interest rate statistics,the following data are collected:

� the credit and deposit interest ratesapplied in respect of non-financialcorporations (S11), as agreed at marketconditions - monthly; and

� interest rates on new business andoutstanding amounts of credit tohouseholds. The �household� sector(S14) contains individuals (from S143 toS145 inclusive) and sole proprietorships(S141 and S142).

Interest rate statistics cover all kinds ofdeposit and loan facilities, except thoseavailable at non-market terms and conditions.

Loans: financial assets that are created whena creditor lends funds directly to a debtor,evidenced by non-negotiable documents.

Deposits: claims of the depositor on othermonetary financial institutions, evidenced bydeposits, documentary deposits, or currentaccount contracts.

With regard to the �household� sectorborrowing and deposit rates, the NationalBank of Hungary monitors the outstandingamounts at the end of the reference month,as well as new business during the monthunder review. In the case of non-financialcorporations, the National Bank of Hungarycollects interest rate data on the amount ofloans granted and deposits placed in thereference month. Although the National Bankof Hungary obtains information from balancesheet statistics on the outstanding amountsof loans and deposits in respect of non-financial corporations at the end of thereference month, these outstanding amountscannot be matched with the appropriateinterest rates. Average interest rates based

on outstanding amounts are therefore notavailable.

Since May 2001, the National Bank ofHungary has collected and published data onthe annual percentage rate of charge (APRC)- in addition to interest rates - on consumercredits to households (excluding soleproprietorships) with a maturity of overthree months. From January 2002, the datacollection on APRC applies to all consumercredit and house purchase loans to the whole�household� sector (including soleproprietorships).


Monetary financial institution (MFI) interestrate statistics are required for the calculationand publication of average interest rates onthe credits and loans to households and non-financial corporations agreed under marketconditions. The present system of interestrate statistics was devised so that

� the burden of reporting agents remainsminimal;

� the methodology complies with internationalstandards; and

� adequate information is provided fordecision-makers, data users, analysts andmarket participants.

In addition to their availability to the generalpublic, interest rate statistics are used by theNational Bank of Hungary in its monetarypolicy decisions and for monitoring theinterest rate transmission mechanism.


The National Bank of Hungary has the rightto collect statistical data as provided by Act



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LVIII of 2001 on the National Bank ofHungary.

Article 4 of the Act provides that �In orderto undertake its tasks, the National Bank ofHungary shall collect and publish thenecessary statistical information�.Furthermore, Article 60 states that withinthe established legal framework, in the formof central bank decrees, the National Bankof Hungary may issue regulations which arebinding on financial institutions, investmentservice providers and clearing houses, as wellas legal entities not qualified as financialinstitutions but which provide auxiliaryfinancial services. These regulations definethe methods and deadlines for datasubmission and the scope of information tobe provided for the performance of theNational Bank of Hungary�s statistical duties,and its tasks as a monetary authority.

The official guideline for the reporting agentsrefers to Government Decree 41/1997 (III.5.)for the definition of the appropriate methodsof calculation of the annual percentage rateof charges and the annualised agreed rate ondeposits. The method is the same as that inCouncil Regulation 87/102/EEC.



For non-financial corporations, the reportingcoverage comprises all banks and specialised

credit institutions that belong to the othermonetary financial institutions sub-sector(S122). In the case of the household sector,in addition to banks and credit institutions,19 savings co-operatives also submit data oninterest rates.

Table 4Reporting coverage of MFI interest rate statistics

Credit institutions Number of institutions Of which:(31 December 2002) reporting institutions

Banks 3 0 3 0Specialised credit institutions 8 5Co-operative credit institutions:

Savings co-operatives* 183 19*Credit co-operatives 6 -

* Only interest rate statistics related to households.

With regard to savings co-operatives, beforeMay 2001 the sample included the largestsavings co-operatives of each of the 19 counties.Since then, the 19 largest co-operatives havebeen selected as a representative sample,irrespective of their location, according tothe total assets on their balance sheets. Theamount of total assets of the reporting savingsco-operatives accounts for 28,76% of thetotal balance sheet of the 189 savings co-operatives. As from 2003, savings co-operativeswill be required to report if the value of theirtotal assets on 30 June 2002 exceeds HUF 5billion (41 co-operative credit institutions).


The prolongation of existing loans or depositsis considered in the same way as a new deal.In contrast, renegotiated interest rate conditionsfor existing loans or deposits - which are stillto mature - are not. Of the data mentioned,only the interest rate agreed in the contractis included, while default interest, penaltyinterest and other charges are not.

The maturity breakdown relative to theinterest rates on loans to non-financialcorporations is as follows:


Hungary

� up to and including three months(floating rate or initial rate fixation);

� between three months and one year(floating rate or initial rate fixation); and

� over one year (floating rate or initial ratefixation).

The maturity breakdown relative to interestrates on deposits is as follows:

� up to and including one month;

� between one month and one year;

� between one year and two years; and

� over two years.

In principle, data collection with respect toloans granted to the household sector coversnot only loans negotiated under marketterms and conditions, but also housepurchase loans subsidised by the state, whichare regulated by Government Regulation 1/2000, which came into effect in February2000. Loans with preferential rates areexcluded from the publications. Thebreakdown of house purchase loans dependson whether the loans:

� are granted under market conditions, or

� are loans with interest rate subsidiesgranted by the state (from February 2000onwards).

The breakdown of consumer credits by typeis as follows:

� overdrafts (including cheque card loans);

� personal loans;

� collateralised loans (with financial assets,e.g. deposit, foreign exchange, securities,etc.);

� instalment credit;

� car purchase loans;

� mortgage loans (not for house purchasepurposes); and

� other (other types of collateralised loans,loans to cover school expenses, etc.).

The breakdown of consumer credits bymaturity is as follows:

� up to three months;

� between three months and one year; and

� over one year.

For mortgage loans, there is no maturitybreakdown.

For the household sector, the National Bankof Hungary also collects data on theannualised agreed rate of deposits.

The maturity breakdown of householddeposits is as follows:

� sight deposits (including current accountdeposits);

� deposits with a maturity of up to onemonth;

� deposits with a maturity of between onemonth and three months;

� deposits with a maturity of betweenthree months and one year;

� deposits with a maturity of between oneyear and two years; and

� deposits with a maturity of over twoyears.

The breakdown by type of interest rate is asfollows:

� fixed rates;

� fixed rates and graduated interest rates;


Hungary

� floating rates; and

� floating and graduated rates.

All data collected from the reporting agentsare transmitted electronically by means ofthe interbank clearing network.


Reporting agents submit data to the NationalBank of Hungary on non-financial corporationsector deposit and lending rates by the ninthbusiness day of the month after the referencemonth. The deadline for reporting householdsector deposit and lending rates is the tenthbusiness day after the reference month.



The interest rates on loans to and depositsfrom non-financial corporations are theaverage of actual interest rates weighted bythe corresponding amounts of lending anddeposit transactions.

The average interest rate for the householdsector is calculated as the average of theend-of-month borrowing and deposit interestrates weighted by the amounts borrowed ordeposits placed during the reference month.When deposits with graduated interest ratesare involved, the basis of the calculation isthe yield obtained during the whole periodto maturity.

On household sector borrowing and depositrates, the National Bank of Hungary publishesthe breakdown of changes in average interestrates according to the following components:

� interest rate movements; and

� changes in composition.

The effect of total changes due to interestrate changes is defined by calculating theaverages of average monthly interest ratesfor a given month, using the amounts ofdeposits and loans in the preceding month asweights.

The method for calculating standardisedinterest rates is as follows:

where:

m = month;

k = number of reporting agents;

Tk,m = transaction amount of the k-threporter at month m;

I k,m = interest rate of the k-th reporterin month m;

S m = total amount of borrowing anddeposit transactions in month m;

A m = average interest rate in month m;and

C m = effect of interest rate changes onthe average interest rate in month m.


There is no formal policy for handling breaksin series, but the usual practice is torecalculate time series for as long as possible.When this is not possible, breaks are markedand explained in footnotes to the publishedtables and in the methodological description.

Since May 2001, the National Bank ofHungary has used the sector breakdown ofthe System of National Accounts (SNA).Now that they belong to the household

Cm

=∑ k, m-1

K

k=1T (Ik, m - Ik, m-1 )

k=1∑ K

Tk, m-1


Hungary

sector, sole proprietorships are not includedin the non-financial corporations sector, incontrast to what was the case with theearlier enterprise sector. Furthermore, thenon-financial corporations sector includesnon-profit institutions serving non-financialcorporations. As data on sole proprietorshipsand non-profit institutions serving non-financial corporations do not have asignificant influence on average interest rates,the time series can be considered homogenous.

5.3.3 Revisions

There is no formal revision policy, but the usualpractice is to check reports before dataprocessing and correct significant errorsimmediately. Ad hoc revisions may berequired after the first release, with furthercorrections introduced at the next regularpublication. Significant revisions are markedand explained in footnotes.

5.4 Publications


The press release on the interest rates onnon-financial corporations sector and thehousehold sector borrowing and deposits arepublished monthly, in accordance with atimetable of regular statistical releases. The

data are published electronically on thewebsite of the National Bank of Hungary(www.mnb.hu) on the second business dayof the second month after the reference month.


After the first release, the interest rate dataalso appear in the Monthly Report of theNational Bank of Hungary. The report ispublished both in hard copy and in electronicformat on the website, 53 days after the endof the reference month.

5.5 Users

Users of the data include the following:


� the IMF;

� the OECD;

� Eurostat;

� the ECB;

� the BIS; and

� others: the press, analysts, etc.

Any queries concerning the issues describedin this country chapter should be addressed to:

Mr. László LakatosStatistical Departmenttel: 36-1-428-26-00 ext. 13-51e-mail: [email protected]

Mrs. Erzsébet KozdronyStatistical Departmenttel: 36-1-428-26-00 ext. 21-29e-mail: [email protected]

6 Contacts at the National Bank of Hungary

Mr. Erik HorgászStatistical DepartmentTel: 36-1-428-26-00 ext. 15-34e-mail: [email protected]

Mrs. Brigitta SulyokStatistical Departmenttel: 36-1-428-26-00 ext. 13-87e-mail: [email protected]


Hungary

Latvia


Latvia


DJRSE Dow Jones Riga Stock Exchange index


LVL Latvian lats

NACE Statistical Classification of Economic Activities in the European Communities

OECD Organisation for Economic Co-operation and Development




RIGIBID Riga interbank bid rate

RIGIBOR Riga interbank offered rate


Latvia


1.1.1 Introduction

The major players in the Latvian financialsector are credit institutions, which accountfor around 88% of the financial sector�s totalassets, while the shares of other financialintermediaries (OFIs) and insurancecorporations/pension funds are 8.4% and3.6% respectively. OFIs are at an early stageof development, and the demand for non-banking financial products has increased onlyin recent years. At present, the followingtypes of OFIs operate in the Latvian financialmarket: leasing companies (6.1% of thefinancial sector�s total assets), investmentfunds (0.2% of the financial sector�s totalassets), pawnshops and other companies,which offer financial intermediation facilitieslike factoring and export/import financing(2.1% of the financial sector�s total assets).

The main difference between OFIs and creditinstitutions is as follows: OFIs finance theirlending activities and investments in securitieswith share capital, profits, loans from banksand investment fund units, and their liabilitiesdo not take the form of either depositsreceived from the public or close substitutesfor deposits.

The sectoral breakdown of the Latvianfinancial sector corresponds to that of theEuropean System of Accounts 1995 (ESA 95).In Latvia, OFIs, like other companies, mustbe registered with the Republic of LatviaEnterprise Register, under whose regulationsthey are required to indicate their businessactivities, stating the core business activity inaccordance with the Statistical Classificationof Economic Activities in the EuropeanCommunities (NACE). The Republic of LatviaEnterprise Register holds information aboutthe economic activities of all Latvian companiesaccording to NACE, and the CentralStatistical Bureau of Latvia uses thisinformation to classify units for statisticalpurposes.

1.1.2 Definitions

An investment company is a public financialand credit joint-stock company whose onlytypes of operation are the management ofinvestment funds as well as the issuance ofcertificates of such funds (investment fundunits) and related activities. Investmentcompanies operate under a licence issued bythe Financial and Capital Market Commissionand in accordance with the Law onInvestment Companies, the Law on Joint-Stock Companies and the Law on Securities.1

The Law on Investment Companies definesan investment fund as a pool of assets that isformed - on the basis of the rights attachedthereto - both of investments underinvestment certificates and of assets acquiredin transactions related to the property of aninvestment fund. Investment funds are open-end and closed-end. An open-end investmentfund is a fund whose managing investmentcompany has the duty to redeem investmentcertificates if so requested by the fund�sinvestors, and the accumulated money maybe withdrawn at any time. A closed-end fundis a fund whose managing investmentcompany is prohibited from redeeminginvestment certificates, and where certificatesof a closed-end investment fund are bought,the money invested cannot be withdrawnfrom the fund. With the aim of reducing risk,the Law on Investment Companies setsprinciples for the diversification of investmentassets and imposes a range of restrictions ontransactions with the resources of aninvestment fund. According to the Law, aninvestment fund must include its investmentpolicy in the prospectus, so that theinvestment policy is available to investors.

There is no special law regulating financialleasing companies and other companiesgranting credit in Latvia. They are subject tothe Commercial Law,2 which regulates allbusiness activities in Latvia.


1 See: www.fktk.lv/law/securities/laws.2 See: www.ur.gov.lv.


Latvia


OFI statistics offer sectoral information and,combined with banking statistics and statisticson insurance corporations and pension funds,provide information on the developments ofthe whole financial market. This is importantfor the Bank of Latvia in view of its role topromote the smooth functioning of thefinancial system in Latvia and to evaluate thecurrent state of the economy.

The State Treasury conducts the financialanalysis of those potential investors whoseinvestments, if made, are able to meet theneed for financing the state budget, providedthe State Treasury receives these funds asloans. OFI statistics are important in termsof analysing the ways of widening the financialmarket by introducing new financialinstruments.

Statistics relating to investment funds areimportant for the Financial and CapitalMarket Commission to discharge its task ofmonitoring investment funds, analysing theiractivities, forecasting developments in thesecurities market and drafting proposals forsecurities market legislation, as establishedby the Law on the Financial and CapitalMarket Commission.


Under the Law on State Statistics, as adoptedon 6 November 1997 and amended in 1999,3

the Central Statistical Bureau of Latvia isresponsible for the collection and publicationof the country�s statistical information oneconomic, demographic and socialphenomena and processes, and theenvironment. The Central Statistical Bureau,therefore, is responsible for the collection,compilation and publication of the country�sstatistics on financial intermediation.Likewise, under the Law on State Statistics,those OFIs that are registered with theRepublic of Latvia Enterprise Register havean obligation to submit statistical surveys tothe Central Statistical Bureau. The Central

Statistical Bureau of Latvia has the followingwebsite: www.csb.lv.

In accordance with the Law on the Financialand Capital Market Commission, the Financialand Capital Market Commission, whichsupervises investment funds, has collecteddata from investment funds for supervisionpurposes since 1 July 2001. The Financial andCapital Market Commission has the followingwebsite: www.fktk.lv.

Statistics on leasing companies are collectedby both the Central Statistical Bureau ofLatvia and the Latvian Lessors� Association.The Latvian Lessors� Association (itsmembers represent about 94% of the leasingmarket) collects statistics from its memberson their leasing and factoring portfolios,broken down by type of asset, sector of thelessee and maturity.



According to the Central Statistical Bureauof Latvia, there were 161 OFIs at the end ofDecember 2000 (see Table 1).

3 See: www.csb.lv/Satr/alik.htm.

The Central Statistical Bureau of Latviacollects data from all enterprises that havean annual net turnover in excess of LVL300,000 and that employ 50 or more people(see Table 2, Stratum 1 �Group of largeenterprises�). For the remaining enterprises(�Group of small enterprises�), the samplingmethod is used (A, B or C). The data for theenterprise group of five or fewer enterprisesmust be based on complete census (see Table2, Stratum A). For enterprise surveys, withineach stratum, the weight of a survey unit iscalculated as the ratio of the total number ofenterprises in the stratum to the number ofresponding enterprises. The Horvitz-Thompson estimator is used. The weightingprocedure adjusts for any non-response.


Latvia

Table 1Distribution of OFIs in Latvia as at December 2000

NACE ESA 95 Number of Reporting coverage In terms of eachcode S123 OFIs in each category’s assets

category Number of Percentage Value of PercentageOFIs in each total assets

category (in LVLthousands)

65.2 OFIs 161 62 39 256550 10065.21 Financial leasing companies 33 17 52 160968 6365.22 Other companies granting credit 38 9 24 6116 265.23 Other financial intermediation 90 36 40 89466 35

Table 2 reflects reporting coverage as ofDecember 2000.

Table 2Reporting coverage of OFI statistics in Latvia

Stratum Total number Sample Stratum limitsof OFIs

1 33 33 Enterprises with an annual net turnover in excess of LVL 300,000and 50 or more employees

A 2 2 Enterprises with an annual net turnover of less than LVL 300,000and 20 to 49 employees

B 10 3 Enterprises with an annual net turnover of less than LVL 300,000and 10 to 19 employees

C 116 24 Enterprises with an annual net turnover of less than LVL 300,000and fewer than 9 employees

Total 161 62

Likewise, investment funds are required toreport to the Financial and Capital MarketCommission. There were three investmentfunds at the end of December 2000 and sixat the end of December 2001.


OFIs, like all other companies, submit twotypes of survey to the Central StatisticalBureau of Latvia: the Annual Survey on theActivity of an Enterprise and the Survey onthe Financial Position of an Enterprise(quarterly and annually). The reporting formsare consistent with the Law on Accountingand the Law on Annual Reports ofEnterprises.

The Annual Survey on the Activity of anEnterprise includes a set of selectedenterprise data on employment, economicactivity, non-financial investment, acquisitionof fixed assets and other data categories.

The annual Survey on the Financial Positionof an Enterprise includes data from thebalance sheet and the profit and loss account,as well as other data.

The quarterly Survey on the FinancialPosition of an Enterprise includes data fromthe profit and loss account and the balancesheet only. The instrument and maturitycategories of the balance sheet are as follows.

Liabilities:

� Equity:


Latvia

� share capital (fixed capital) brokendown by ownership:

- government, public enterprises,local governments, enterprisesowned by local government, publicpension funds,

- other resident legal persons,

- resident private persons,

- social and religious organisations,and

- non-residents;

� share issue premium;

� revaluation reserve on long-terminvestment;

� reserves; and

� retained profit:

- of the previous year and

- of the reporting year.

� Accruals.

� Creditors:

� short-term; and

� long-term.

Assets:

� Long-term investment:

� intangible investment;

� fixed assets; and

� long-term financial investment.

� Current assets:

� stocks;

� debtors;

� securities and holdings; and

� cash.

No geographical and sectoral breakdownsare requested in the above surveys.

Statistical surveys are sent to the CentralStatistical Bureau of Latvia by mail. Afterreceipt, the logical and mathematical controlof data is performed and imprecisioncorrected. Data are grouped according tothe NACE and stored electronically indatabases (ACCESS and FOXPRO).

For supervision purposes, the Financial andCapital Market Commission receives thefollowing quarterly reports from investmentcompanies regarding the investment fundsunder their management:

� a report on assets and liabilities, whichreflects assets (cash, investments insecurities and real estate, time depositswith credit institutions), liabilities and netassets;

� a report on income and expenditure,which reflects income and expenditureof investment funds, and an increase or adecrease in the value of investments;

� a report on the flow of net assets, whichreflects changes in net assets in theaccounting period; and

� a report on the investment portfolio,which reflects investments made by thefund by type of security, time depositsheld with banks and investments in realestate.

The above-mentioned reports are preparedin accordance with the Law on InvestmentCompanies, the Law on Accounting and theFinancial and Capital Market Commission�sRegulation on Drawing up the FinancialStatements of Investment Funds.


Latvia

The Financial and Capital Market Commissioncollects data in both hard copy and electronicform.


Table 3 reflects submission dates of statisticalsurveys by the Central Statistical Bureau ofLatvia.

Table 3Timeliness of OFI statistics reporting in Latvia

Statistical survey Time of reporting

Annual Survey on the Activity of an Enterprise No later than 15 FebruarySurvey on the Financial Position of an Enterprise (annual) No later than 30 AprilSurvey on the Financial Position of an Enterprise (quarterly) 15th day of the month following the reporting quarter

The Financial and Capital Market Commissioncollects data from investment companiesregarding the investment funds under theirmanagement on a quarterly basis. Thedeadline for submitting reporting forms isthe 25th day of the month following thereporting quarter.



The database of the Central Statistical Bureauof Latvia comprises statistical data series onOFIs from 1995 onwards. Changes to thenumber of reporting institutions do not entailany specific procedures. If there is any changein methodology, past series are adjustedautomatically wherever data allow this to bedone. In cases where adjustments are notpossible, the breaks are highlighted infootnotes.

1.3.2 Revisions

The Central Statistical Bureau of Latvia hasthe following revision procedures. Data arepreliminary when first released. They arerevised after more complete data becomeavailable, and the reasons for the revisionare explained in the introduction to thequarterly bulletin entitled �MacroeconomicIndicators of Latvia� (OFI statistics areincluded in the data of sector S12 - Financialcorporations). The last revisions to thequarterly data are made during thecompilation of the annual national accounts,and the final quarterly data are published inthe following issue of the aforementionedquarterly bulletin, in time series for theprevious year. Major changes in themethodology are announced in the relevantpublications at the time the data based onthe revised methodology are first published.

The Financial and Capital Market Commissionrevises information provided by investmentfunds following the receipt of reports andprior to their publication.

1.4 Publications

The Central Statistical Bureau of Latvia doesnot publish data on the activities of OFIsseparately, but includes them in its overallinformation on financial intermediation(sector S12 according to the ESA 95, orsector J according to NACE). Data onfinancial intermediation appear in thefollowing main publications of the CentralStatistical Bureau of Latvia:


Latvia

� �Statistical Yearbook of Latvia�(annually);

� �Macroeconomic Indicators of Latvia�(quarterly);

� �Monthly Bulletin of Latvian Statistics�;

� �Basic Financial Indicators of BusinessActivity� (quarterly and annually);

� �National Accounts of Latvia� (annually).

Data on financial intermediation are alsoreleased to the public on the website of theCentral Statistical Bureau of Latvia(www.csb.lv).

Since 2001, the summaries of reports byinvestment funds have been available on theFinancial and Capital Market Commission�swebsite (www.fktk.lv).

The Latvian Lessors� Association providesdata on the development of the leasingmarket in Latvia, upon request by the Bankof Latvia, other financial institutions and themedia.

1.5 Users

The Bank of Latvia, the Financial and CapitalMarket Commission, the Latvian StatisticalInstitute and other users of general statisticalinformation use OFI statistics for financialmarket analysis. The Central StatisticalBureau of Latvia uses OFI data to compilethe national accounts. The Latvian Lessors�Association uses information on leasingcompanies to defend the rights and interestsof lessors in the Latvian financial market.The Association also ensures the flow ofinformation between itself and financialinstitutions and makes the relevant dataavailable to the general public.


2.1.1 Definitions

The money market is the market for short-term financial claims, e.g. Treasury bills, interbankdeposits, commercial papers, repurchaseagreements (repos) with an original maturityof up to one year. It is a market with highliquidity. Interbank deposits (with a maturityof up to one month) dominate this market.

The capital market is the market for governmentdebt securities, debt securities of joint-stockcompanies, mortgage bonds and other securitieswith an original maturity of over one year, asopposed to the money market where short-term debt instruments are traded. In Latvia,government bonds play a far more significantrole than private debt securities.

The equity market is the market wherecompanies sell new issues of stocks toacquire new capital and where outstanding

2 Financial markets statistics

equities are traded. The Riga Stock Exchangeprovides an organised market for shares andbonds; however, the over-the-counter(OTC) market, where securities are boughtor sold outside the jurisdiction of the RigaStock Exchange, also accounts for a significantproportion of the total equity market.

The foreign exchange market is the marketfor foreign exchange transactions wherebuyers and sellers (credit institutions,enterprises and households) are in contactto buy and sell foreign currencies. The maintypes of transactions are spot, forward andswap transactions. Latvian legislation and thepolicy of the Bank of Latvia ensure a freemovement of capital to and from Latvia.There are no restrictions on current, capitaland financial transactions. Credit institutionsand foreign exchange bureaux actively operatein the foreign exchange market in Latvia.

There is no organised commodity market inLatvia.


Latvia


Financial market data characterise the bankingsystem, its activities and banks� liquidity. Dataare used as the basic indicators of conditionsand developments in the financial market andare needed to implement monetary policy andto monitor the transmission of monetary policy.

Financial market statistics are important forthe Financial and Capital Market Commissionin terms of monitoring the financial and capitalmarket participants under its supervision. Theyare also important in terms of analysing theactivities of aforementioned market participantsas well as the appearance of new financialinstruments. Finally, financial market statisticsare needed to forecast financial marketdevelopments, as laid down in the Law onthe Financial and Capital Market Commission.

The Ministry of Finance analyses statistics onthe interbank money market and the capitaland equity markets to determine objectivesfor the central government debt managementstrategy. The analysis is used to develop theannual financing and/or borrowing plans ofthe Treasury and for daily cash management.


The Law on State Statistics defines theorganisation of state statistics in the Republicof Latvia and authorises the Bank of Latvia tocollect money and banking as well as balanceof payments statistics.4

In accordance with paragraph 2 of Article 7of the Law on the Financial and CapitalMarket Commission,5 the Financial andCapital Market Commission has the right torequest and receive the necessary informationfrom financial and capital market participants.

The Law on Securities determines theresponsibilities of the Latvian CentralDepository both with regard to the safecustody of all securities that have been issued

and are in public circulation and with regardto providing the settlement of the tradesconcluded on the Riga Stock Exchange andthe OTC market. Pursuant to this law, theLatvian Central Depository and the RigaStock Exchange are entitled to provide accessto market information on public issues.



The Bank of Latvia and the Financial and CapitalMarket Commission compile money marketstatistics. All credit institutions report directlyto the Bank of Latvia and the Financial andCapital Market Commission. Data from Reutersare also used.

Providers of capital market statistics are theRiga Stock Exchange and the Latvian CentralDepository. Likewise, the Bank of Latviacollects data on holders of government bondsfrom credit institutions, while the Financialand Capital Market Commission collects dataon holders of long-term debt securities fromcredit institutions and brokerage companies.

Providers of equity market statistics includethe Riga Stock Exchange and the LatvianCentral Depository. Likewise, the Financialand Capital Market Commission collects dataon holders of equity securities from creditinstitutions and brokerage companies.

The Bank of Latvia compiles foreign exchangemarket statistics. All credit institutions andforeign exchange bureaux report directly toit. Data from Reuters are also used.


A description of the reporting schemes forstatistics relating to debt markets and assetmarkets are provided in tables 4, 5 and 6.

4 See: www.csb.lv/Satr/alik.htm and Section 2 of the countrychapter on “Latvia” in “Money and banking statistics in theaccession countries: Methodological manual”.

5 See: www.fktk.lv.


Latvia

Table 4Debt market statistics compiled by financial market institutions in Latvia

Data collected

Medium of datacollectionMethodologicaland accountingrules

Report on interestrates and volumesof interbankmarket loans.Reports includedata on newlygranted loans andnewly attracteddeposits by creditinstitutions.Interbank marketinterest ratesRIGIBID (Rigainterbank bid rate)and RIGIBOR(Riga interbankoffered rate) arecalculatedpursuant to theRegulation for theCalculation ofRIGIBID andRIGIBOR.Banks’ quotesinclude thefollowing maturitycategories:– overnight– one day– one week– one month– three months– six months and– twelve monthsHard copy andelectronicWeighted averageinterest rates andoriginal maturityare used (SeeSection 2.3.1)RIGIBID andRIGIBOR rates arebased on thequotes of banksselected by theBank of Latvia.These banks arethe most active inthe Latvian moneymarket. The high-est and lowestrates are elimi-nated and anaverage of theremaining quotesis taken.

Report on LatvianTreasury bills

Breakdown bymaturity:– one month– three months– six months and– twelve months

Breakdown byholder:– residents/non-residents– publicenterprises– privateenterprises– privateindividuals and– others

For data on theprimary marketfor Treasury bills,see Sub-section 3

Hard copy

Nominal value ofbills at the end ofthe month

Value of Treasurybills broken downby originalmaturity

Value of short-term corporatedebt securitiesbroken down byoriginal maturity.

Value and numberof transactions inregisteredshort-term debtsecurities

Electronic

Securitiesregistered innominal value

Data on auctions.

Trading data onshort-term debtsecurities:– issuer’s name– ISIN code– turnover– best bid– best ask and– nominal value

Electronic

Market values areused

Statistical area Money market statistics

Interbankinterest rates Short-term debt securities

Report onsecuritiestransactions

Report onsecuritiesportfolios.

Data reflecttransactions withsecurities by typeof security andholders ofsecurities(resident/non-resident, financialintermediaries)

Hard copy andelectronicData reflectmonthly turnover


Latvia

Table 4 (cont'd)Debt market statistics compiled by financial market institutions in Latvia

Statistical area Money market statistics

Interbankinterest rates Short-term debt securities

Credit institutions

Bank of Latvia

Internal database

Latvian CentralDepository

Table 5

Statistical area Capital market statistics

Data collected

Medium of datacollectionMethodological andaccounting rules

Reporting agents

Collecting agents

Report on LatvianTreasury bonds

Breakdown bymaturity:– two years– three years and– five years

Breakdown byholder:– residents/non-residents– public enterprises– privateenterprises– private individualsand– others

For data on theprimary market forTreasury bonds, seeSection 3Hard copy

Nominal value andoriginal maturity areusedCredit institutions

Bank of Latvia

Report on securitiestransactions

Report on securitiesportfolios

Data reflecttransactions withsecurities by type ofsecurity and holder(resident/non-resident, financialintermediaries)

Hard copy andelectronicData reflect monthlyturnover

Brokeragecompanies and creditinstitutionsFinancial and CapitalMarket Commission

Data on auctions heldat the Riga StockExchange

Trading data onlong-term debtsecurities:– issuer’s name– ISIN code– coupon– turnover– best bid– best ask and– nominal value

Electronic

Market and nominalvalues used.

Internal database

Riga Stock Exchange

Value of registeredgovernment debtsecurities

Value of registeredcorporate debtsecurities

Coupon andprincipalpayments executedthrough the LatvianCentral Depositoryover the course of theyear

Value and number oftransactions inregistered long-termdebt securities

Electronic

Securities registeredin nominal value

Internal database


Reporting agents

Collecting agents

Credit institutions

Bank of Latvia

Internal database

Riga StockExchange

Brokeragecompanies andcredit institutionsFinancial andCapital MarketCommission


Latvia

Table 6Asset market statistics compiled by financial market institutions in Latvia

Statistical area Equity market Foreign exchangemarket

Data collected

The medium ofdata collectionMethodologicaland accountingrules

Reporting agents

Collecting agents

Data on privatisationauctions

Market capitalisation(at the end of period;in millions of lats)

Data on transactionsfor the calculation ofthe Riga StockExchange priceindex and the DowJones Riga StockExchange (DJRSE)index

Electronic

Market values areused.

The Riga StockExchange priceindex is calculatedaccording to theequal weightedmethodologyThe DJRSE index iscalculated by DowJones according to itsstandardmethodology.

Internal database

Riga Stock Exchange

Reports on securitiestransactions

Report on securitiesportfolios

Data reflecttransactions withsecurities by type ofsecurity and holder(resident/non-resident, financialintermediaries)

Hard copy andelectronicData reflect monthlyturnover.

Brokeragecompanies and creditinstitutions

Financial and CapitalMarket Commission

Report on purchases andsales of foreign currenciesin cash

Report on purchases andsales of foreign currencies(foreign currency for lats)

Report on purchases andsales of foreign currencies(foreign currency forforeign currency)

Report on foreignexchange transactions

Hard copy

Weighted averageexchange rates are used(See Sub-section 2.3.1).

Report on foreignexchange transactionscomprises data brokendown by type oftransaction (spot, forward,swap and other), counterpart (creditinstitutions, non-banks,households), residency(resident/non-resident),and currency (OECDcountries, other foreigncurrencies).Credit institutions andexchange bureaux

Bank of Latvia

Value of publicshares registeredwith the LatvianCentral Depository

Value of investmentfund units registeredwith the LatvianCentral Depository

Value of shares withrestrictedtransferabilityregistered with theLatvian CentralDepository

Dividend paymentsexecuted through theLatvian CentralDepository in thecourse of the year

Value and number oftransactions inregistered equities

Electronic

Securities traded onthe Riga StockExchange areregistered at marketvalue; otherwise, thenominal value isused.

Internal database

LatvianCentral Depository


Latvia


Table 7 below outlines the time range of thedata collected and the frequency of reporting.

The RIGIBID and the RIGIBOR are calculateddaily.

Table 7Time range of financial market data collected and frequency of reporting

Data collected Time range Frequency Collecting agents

Report on interest rates and volumes ofinterbank market loansReport on Latvian Treasury billsReport on Latvian Treasury bondsReport on purchases and sales offoreign currencies in cashReport on purchases and sales offoreign currencies (foreign currency forlats)Report on purchases and sales offoreign currencies (foreign currency forforeign currency)Report on foreign exchangetransactionsReport on securities transactions

Report on securities portfolios

Value of Treasury bills broken down byoriginal maturity

Value of short-term corporate debtsecurities broken down by originalmaturityValue of registered government debtsecurities

Value of registered corporate debtsecurities

Value of public shares registered withthe Latvian Central Depository

Value of investment fund units regis-tered with the Latvian Central Deposi-toryValue of shares with restricted transfer-ability registered with the LatvianCentral DepositoryValue and number of transactions inregistered short-term debt securities

Value and number of transactions inregistered debt securities

Bank of Latvia

Bank of LatviaBank of LatviaBank of Latvia

Bank of Latvia

Bank of Latvia

Bank of Latvia

Financial andCapital MarketCommissionFinancial andCapital MarketCommissionLatvian CentralDepository









Next working day after the 7th, 15th,23rd and last day of the month7th day of the following month7th day of the following month3rd day of the following month

7th day of the following month





On-line

On-line

On-line

On-line

On-line

On-line

On-line

On-line

On-line

Weekly

MonthlyMonthlyMonthly

Monthly

Monthly

Monthly

Monthly

Monthly

Monthly/quarterly/annuallyMonthly/quarterly/annuallyMonthly/quarterly/annuallyMonthly/quarterly/annuallyMonthly/quarterly/annuallyMonthly/quarterly/annuallyMonthly/quarterly/annuallyWeekly/monthly/quarterly/annuallyWeekly/monthly/quarterly/annually

The Riga Stock Exchange has concludedagreements with a number of data vendors.Most of them are real-time data receivers,although there are also agencies that providedata on a weekly and monthly basis.


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2.3.1 Basis of calculation and qualitycontrol

The interest rates reported in the Report onInterest Rates and Volumes of InterbankMarket Loans are weighted average interestrates. Credit institutions must calculateinterest rates for reporting purposes, usingthe following formula:

V1*R1 + V2*R2 +...Vn*Rn

where:

RW is the weighted average rate;

Vi is the volume of the i-th new loan (ordeposit); i = 1, 2, ... n;

is the total volume of all new loans (ordeposits); and

Ri is the annual rate of the i-th new loan(or deposit) agreed between thereporting institution and other creditinstitutions.

Table 7 (cont'd)Time range of financial market data collected and frequency of reporting

Data collected Time range Frequency Collecting agents

Value and number of transactions inregistered equities

Coupon and principal paymentsexecuted through the Latvian CentralDepository in the course of the yearDividends payments executed throughthe Latvian Central Depository in thecourse of the yearInvestor structure in Latvia (forms ofownership)Investor structure in Latvia (residents/non-residents)Number of owners of securities inLatvia




Latvian CentralDepositoryLatvian CentralDepositoryLatvian CentralDepository

On-line

On-line

On-line

First month of the following year



Weekly/monthly/quarterly/annuallyAnnually

Annually

Annually

Annually

Annually

Data in the Reports on Latvian Governmentsecurities are end-of-period data, and aregiven in nominal values.

Data in the reports on purchases and salesof foreign currencies are total amounts ofeach currency purchased or sold during thereporting month and weighted averageexchange rates. Credit institutions andforeign exchange bureaux must calculateweighted average exchange rates forreporting purposes, using the followingformula:

A1*E1 + A2*E2 +...An*En

where:

EW is the weighted average exchange ratefor each currency;

Ai is the amount of the i-th currencypurchased (or sold); i = 1, 2, ... n;

is the total amount of all currenciespurchased (or sold); and

Ei is the current exchange rate of the i-thcurrency purchased (or sold).

∑ VRW =

∑ V

∑ AEW =

∑ A


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Data in the Report on Foreign ExchangeTransactions are total amounts of purchasedor sold currency during the reporting month.

Data in the Reports on Securities Transactionsand Securities Portfolios reflect turnoverduring the reporting month.

The Riga Stock Exchange uses the simplearithmetic averaging method when calculatingaverage data.

The Latvian Central Depository publishesend-of-period data.


No breaks in series have occurred in financialmarket statistics compiled by the Bank ofLatvia as a result of the minor changes in themethodology regarding the Bank of Latvia�sreporting forms referred to in Sub-section 2.

The Bank of Latvia�s policy for adjusting timeseries is as follows:

� past series are adjusted where data allowfor this; and

� in other cases, adjustments which aredifficult are not made for past periodsand data remain incomparable. Thebreaks are highlighted and informationabout changes in the methodology is alsoprovided when data compiled on the basisof the new method are first released.

The Financial and Capital Market Commissionhas radically changed the Report on Securitiesand the Report on Securities Portfolios;therefore, the reports regarding the previousperiods cannot be compared. The Financialand Capital Market Commission announceschanges in the methodology on its website.The Commission does not adjust previoustime series.

No breaks have occurred in the series withrespect to statistics from the Riga StockExchange, as they have an online database.

No breaks in series have occurred forfinancial and capital market statistics, whichare compiled by the Latvian CentralDepository. If there are any changes in themethodology, at least one month�s advancenotice is given of changes to participants inthe Latvian Central Depository, in writtenform, and to the public, via the website ofthe Latvian Central Depository (www.lcd.lv),and to the mass media. Information aboutchanges in the methodology is also providedwhen the data compiled using the newmethod are first published.

2.3.3 Revisions

Where revisions are made after the monthlypublication, they are reported as such andare accompanied by explanatory notes.Quarterly data published in the quarterlyMonetary Review are final. At least onemonth�s advance notice is given of changes inthe methodology via the Bank of Latvia�swebsite. Information about changes in themethodology is also provided when the datacompiled on the basis of the new methodare first published.

The Financial and Capital Market Commissionrevises data before dissemination or publication.

There are no particular revision proceduresregarding statistics of the Riga StockExchange. The statistics published on the RigaStock Exchange�s website on a regular basisare prepared by software programs, so thatthere should be no inaccuracies.

Aggregated data on the value (capitalisation)of securities deposited with the LatvianCentral Depository, which are compiled onthe first working day after the close of thereporting period, are revised to reflectchanges in the market value of securities.The final data are then sent to the LatvianCentral Depository participants and the massmedia and are available on the website of theLatvian Central Depository. Explanatorynotes are given in respect of revised figuresat the time of publication of the revised data.


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2.4 Publications


RIGIBID and RIGIBOR quotes are fixed dailyat 12 noon local time and announced onReuters� �LATZ� page and on the Bank ofLatvia�s website (www.bank.lv).

Money market interest rates are released ona weekly basis by posting them on the Bankof Latvia�s website (www.bank.lv). Thecurrency breakdown is in lats and OECDcountry currencies. The maturity breakdownof loans is as follows:

� overnight;

� up to one month;

� over one month and up to three months;and

� over three months.

The weighted average interest rate ondomestic interbank loans in lats is publishedin the monthly Monetary Bulletin, which isavailable to the public in Latvian and English40 days after the reporting month in hardcopy and on the Bank of Latvia�s website.

As of 2001, the summaries of monthlyreports on securities transactions andmonthly reports on securities held andowned by credit institutions and brokeragecompanies are available on the website ofthe Financial and Capital Market Commission(www.fktk.lv).

The Riga Stock Exchange publishes the daily,weekly, monthly, quarterly and annualstatistics on prices, yields, turnovers, quantities,percentage changes, capitalisation, indexvalues, etc. Statistics are published on thelast day of the reference period (day, week,month or quarter). The annual survey mightbe delayed for ten working days. Publicationsof the Riga Stock Exchange are available inelectronic form on its website (www.rfb.lv)or in hard copy.

The Latvian Central Depository publishesweekly, monthly, quarterly and annual dataon the value and number of transactionssettled by the Latvian Central Depository.Monthly, quarterly and annual data on theend-of-period market value of securitiesdeposited (registered) with the LatvianCentral Depository are also published. Thisinformation is based on data recorded in theLatvian Central Depository database. Quarterlyand annual information is published on itswebsite (www.lcd.lv) and sent to the LatvianCentral Depository participants and themedia. Weekly and monthly data are sent tothe Latvian Central Depository participantsand distributed via the media. Data arepublished no later than on the fifth workingday after the close of the reporting period(week, month, quarter and year).


The quarterly Monetary Review is used topublish monthly data on interest rates onloans in lats and foreign currencies with thefollowing breakdown by maturity:

� overnight;


� over one month and up to three months;and

� over three months.

Likewise, the Bank of Latvia publishesmonthly data on loans in lats and foreigncurrencies granted in the interbank marketto domestic and foreign credit institutions.

The Bank of Latvia also releases data onholdings of government securities, brokendown by holder (Bank of Latvia, residentcredit institutions, public/private enterprisesand other residents). Non-resident holdersof government securities are divided into twogroups: OECD country banks and OECDcountry enterprises.


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The publication is available in Latvian andEnglish three months after the reportingquarter in hard copy and on the Bank ofLatvia�s website.

The Riga Stock Exchange also publishes theGuide to Listed Securities every year. It isissued by the Riga Stock Exchange; however,some of the information published is sourcedfrom the listed companies or debt securitiesissuers. It contains the statistics of tradingdata and information on the listed companiesand debt securities issuers. The time periodcovered is one-and-a-half years, from 1January of the previous year to 30 June ofthe following year. The Guide to ListedSecurities is a bound publication producedtypographically, and is published in mid-August. This publication is available on theRiga Stock Exchange�s website or in hardcopy.

The Latvian Central Depository alsopublishes statistics on dividends, coupon andprincipal payments executed through theLatvian Central Depository during the year.This information is based on data recordedin the Latvian Central Depository database,is sent to the Latvian Central Depositoryparticipants and the media, and published onthe website of the Latvian Central

Depository (www.lcd.lv) on a quarterly basis.Information on the investor structure inLatvia (in terms of ownership and residents/non-residents) and on the number ofsecurities owners in Latvia is also collectedfrom the Latvian Central Depositoryparticipants. Data are published on an annualbasis no later than on the 30th working dayafter the close of the reporting year.

2.5 Users

The main users of financial market data arethe Bank of Latvia, the Ministry of Finance,the Central Statistical Bureau of Latvia, theFinancial and Capital Market Commission, themedia and the general public.

The main users of data on the Riga StockExchange market are investors, which areinterested in prices, volumes and othertrading information. Occasionally, the RigaStock Exchange trading data are used foranalytical surveys on financial markets ormacroeconomics. Also, the Riga StockExchange statistics are used in surveys onthe economy as a whole, since the Riga StockExchange is the only licensed exchange inLatvia.



3.1.1 Definitions

The public offering of securities isunderstood as an offer to acquire securitiesand to announce any information on thepossibility of acquiring securities via the massmedia or via other means of communicationif such an offer has simultaneously been madeto at least 50 people or addressed to anunspecified number of people (paragraph 36of Article 1 of the Law on Securities).

The public circulation of securities isunderstood as the acquisition or transfer of

securities issued in series, which takes placeas a result of a public offer (Article 2 of theLaw on Securities).

The private placement of debt securities andthe closed issue of equities represent a saleof securities that does not involve any publicoffering, general advertising or generalsolicitation.

The issue (settlement) date is the date onwhich securities are sold in a public offeringand are registered with the Latvian CentralDepository in the name of the buyer.


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The main authorities involved in securitiesissues statistics in Latvia are the Financialand Capital Market Commission, the LatvianCentral Depository and the Bank of Latvia.The Financial and Capital Market Commissionauthorises securities issues for public offeringand supervises the securities market. TheLatvian Central Depository keeps securitiesaccounts for all issuers and custodians ofsecurities in public circulation. Accounts ofsecurities that are not in public circulationare registered with the Latvian CentralDepository when the issuer wishes to do so.The Bank of Latvia keeps accounts ofgovernment securities as it acts as a custodianfor banks, and banks keep the major part oftheir government securities portfolios withthe central bank.

In Latvia, securities issues statistics are availableon publicly issued securities and debt securitiesissued in private placements that are depositedwith the Latvian Central Depository.

The Financial and Capital Market Commissionregisters securities for initial public offeringand for putting securities in public circulation,in accordance with Article 12 of the Law onSecurities.6

The Financial and Capital Market Commissionregisters:

� shares and other securities that evidencea holding in a limited company, the rightto a dividend or income if such securitiesmay be the subject of public circulation;

� bonds and other debt securities whichare issued in series and are publiclyoffered either separately or togetherwith other liabilities or income rights;

� securities which are issued consideringthe principle of combining the provisionsreferred to in the previous two items;

� fund units of investment funds, as well asother securities that evidence a holdingin mutual investment funds or othersimilar investment formations;

� any agreement under which a personinvests money in an enterprise or acompany, anticipating an income inaccordance with this agreement, wherethe conclusion of such an agreement hasbeen publicly offered under theprocedure referred to in Article 2 of theLaw on Securities; and

� other securities, including derivedsecurities that are put into publiccirculation under the procedure set forthin Article 2 of the Law on Securities.

Under Article 6 of the Law on Securities, theLatvian Central Depository provides safecustody for all securities which are issuedand are actually in public circulation in theRepublic of Latvia, conducts settlements inthe securities market and executes corporateactions. The Latvian Central Depositorycompiles statistics concerning all securitiesissues deposited with the Latvian CentralDepository.

As the Government�s fiscal agent, the Bankof Latvia organises the issuance of governmentsecurities denominated in the nationalcurrency and keeps records of all auctions.Moreover, it compiles statistics on holdersof government securities. Since May 2002non-competitive auctions of governmentsecurities have been organised at the LatvianCentral Depository.


The Financial and Capital Market Commissionrequests detailed information concerningsecurities issues for security marketsupervision purposes and also for publicinformation needs.

Statistics on securities issues compiled bythe Latvian Central Depository are used bysecurities market participants to analysetrends in the market. Statistics on the

6 See: www.fktk.lv/law/securities/laws.


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structure of securities owners and dynamicsof the number of securities accounts areused in macroeconomic analyses.

Statistics on government securities issues andthe ownership structure of governmentsecurities are important for monetary policy,because government securities are the mainunderlying financial assets used in monetaryoperations. The Bank of Latvia needs to knowwhether banks have sufficient collateral toparticipate in operations with the centralbank.

Statistics on holders of government securitiesallow the Bank of Latvia to analyse thestructure of the demand for money and bothcompanies� and households� holdings offinancial assets that characterise economicactivity. It also provides information forforeign investors.


Pursuant to paragraphs 5 and 8 of Article 6of the Law on the Financial and CapitalMarket Commission, the Financial and CapitalMarket Commission is required, in additionto fulfilling other functions, to collect, analyseand publish information relating to thefinancial and capital markets and to engage insystemic studies, analysis and forecasting ofthe development of the financial and capitalmarkets. Likewise, pursuant to paragraph 2of Article 7 of the Law on the Financial andCapital Market Commission, the Commissionhas the powers to request and receive anyinformation required for the execution of itsfunctions from financial and capital marketparticipants.

The Latvian Central Depository collectsstatistics on securities transactions concludedat the Riga Stock Exchange and on the OTCmarket in accordance with regulations issuedby the Financial and Securities MarketCommission. The Latvian Central Depositorycollects and publishes other information on

securities issues for statistical purposes,based on the securities market practices.

The Bank of Latvia compiles statistics ongovernment securities issues pursuant toArticle 5 of the Law on the Bank of Latvia,which empowers the Bank of Latvia to act asthe Government�s financial agent in bankingtransactions upon receipt of specificauthorisation from the Government, andArticle 39, which requires the Bank of Latviato approve statistical reporting forms andthe procedures for submitting such reports.



The Financial and Capital Market Commissionreceives information from all public issuers.All brokerage companies and credit institutions,which have received a licence from theCommission to conduct intermediaryactivities in the public circulation of securities,submit data on securities holders to theFinancial and Capital Market Commission.

The Law on Securities prescribes that allpublicly issued securities in Latvia have to bedeposited with the Latvian CentralDepository, except for securities which arealso in public circulation abroad and whichhave been registered in another countrybefore being registered with the Financialand Capital Market Commission. The LatvianCentral Depository maintains a 100%dematerialised securities safe-custody system.The Latvian Central Depository may alsoregister closed securities issues. If a closedsecurities issue is registered with the LatvianCentral Depository, it is included in thestatistics published by the Latvian CentralDepository.

Information concerning the issue andredemption of government securities isavailable from the Bank of Latvia, becausethe Bank of Latvia organises competitiveprimary market auctions of government


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securities. Information concerning issues ofgovernment securities in non-competitiveauctions may be obtained from the LatvianCentral Depository. In addition, the Bank ofLatvia collects statistics on governmentsecurities holdings from all credit institutions.


According to the Law on Securities all publicsecurities are dematerialised.

In order to maintain the register of issuesregistered with the Financial and CapitalMarket Commission, the Commissioncollects the following information:

� name of the issuer;

� address of the issuer;

� type and class of securities of each issueof the issuer registered with the Financialand Capital Market Commission;

� nominal value of a security;

� number of securities in each issue; and

� date of issue.

Data are collected on a security-by-securitybasis. Issuers provide this informationdirectly. The data are stock data.

Data are input electronically to obtain aversion of the reports in the Microsoft Excel2000 environment and are stored by meansof the Microsoft SQL server 2000.

The Financial and Capital Market Commissioncollects statistics on securities holdings andprovides the following information:

� owner of securities (financial intermediaries,residents and non-residents); and

� type of securities (equities, corporatefixed income, government fixed income,investment fund units and derivatives).

The data are aggregated stock data. Securitiesare valued at their market price. A maturitybreakdown is not given.

The registration of securities in the safe-custody system of the Latvian CentralDepository fully complies with internationalstandards. Each issue of securities is assigneda unique International Securities IdentificationNumber (ISIN) code. As a member of theAssociation of National Numbering Agencies,the Latvian Central Depository has had theright to allocate ISIN codes for all securitiesissued in Latvia since 1997. The Classificationof Financial Instruments code is used for thedescription of securities in accordance withthe ISO 10962 standard.

Data are collected using security-by-securityinformation. No commercial data providersare involved. The Latvian Central Depositoryuses security-by-security information fromthe securities database maintained by theLatvian Central Depository.

Currently, there is no sectoral classificationof issuers. This year, the Latvian CentralDepository plans to introduce the followingsectoral breakdown of issuers:

� central bank;

� credit institutions;

� non-monetary financial institutions;

� non-financial corporations;

� central government;

� other general government; and

� international organisations.

The classification of issuers according to theresidency principle (residents, non-residents)will also be added.

The following data on securities issues arepublished for statistical purposes:


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� type of securities;

� category of securities;

� type of issue;

� ISIN code;

� name of issuer;

� title of securities issue;

� Classification of Financial Instrumentscode;

� denomination currency;

� volume of securities issue;

� nominal value of securities;

� market value (price) of shares;

� coupon rate (for debt securities only);

� coupon payment dates (for debtsecurities only);

� maturity date (for debt securities only);

� listing on the stock exchange; and

� name of issuer agent.

The Latvian Central Depository uses thefollowing classification of securities:

� shares:

� public shares and

� shares with restricted transferability;

� investment fund units:

� open-end investment fund units and

� closed-end investment fund units;

� government debt securities:

� Treasury bills,

� Treasury notes and

� Treasury bonds;

� local government debt securities:

� short-term local government debtsecurities,

� medium-term local government debtsecurities and

� long-term local government debtsecurities;

� corporate debt securities:

� money market instruments:

- commercial papers,

- certificates of deposit and

- other money market instruments,

� corporate bonds,

� mortgage bonds and

� corporate bonds with specialcharacteristics.

Data are collected and stored electronicallyby means of the Microsoft SQL server 2000.The Latvian Central Depository publishesend-of-period figures.

The Bank of Latvia keeps a database on theissue and redemption of governmentsecurities in breakdown by maturity (one,three, six and twelve-month Treasury billsand two, three and five-year Treasury bonds).Data are collected on a security-by-securitybasis.

The Bank of Latvia collects statistics onholdings of government securities, based ondetailed reports from credit institutions. Data


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are in nominal values and on an aggregatedbasis. The data are stock data.

The counterpart breakdown used for theitems is as follows:

� residents/non-residents;

� credit institutions;

� private enterprises;

� public enterprises;

� private individuals; and

� other.

The maturity shown is the original maturityand represents all maturity categories used.The reporting population is all creditinstitutions. Reports are submitted in hardcopy, but a move to an electronic reportingsystem has been considered. Data are inputelectronically to obtain a version of thereports in the Microsoft Excel 2000environment and are stored by means of theMicrosoft SQL server 2000.


The Financial and Capital Market Commissioncollects information when registering issues.Data on securities holders are submitted tothe Financial and Capital Market Commissionno later than on the tenth day after thereference month.

The Latvian Central Depository started itsoperational activity on 27 June 1995. Sincethat day, the Latvian Central Depository hasmaintained a database, which is used forstatistical purposes. Data collection is online.

Data on results of primary market auctionsof government securities are availableimmediately after the auction.

Credit institutions submit reports onholdings of government securities to the Bankof Latvia on a monthly basis, and thereporting date shall be no later than theseventh day of the following month. Datacollection began in July 1996.



The Financial and Capital Market Commissiononly collects information concerningregistered issues, and no special calculationsare made, with the exception of theaggregation of information concerningregistered issues during certain periods(quarters and years). The followinginformation is aggregated up: types, quantityand total amount of registered securities.

The Latvian Central Depository publishesend-of-period data.

Data reported to the Bank of Latvia are end-of-period data and nominal values. Data arecompared with the accounts in securitiessettlement systems at the Bank of Latvia andwith the accounts of the Latvian CentralDepository.


As soon as the Financial and Capital MarketCommission receives information on changesin general information on the issuer, theCommission makes the relevant changes inthe register. Changes in aggregated data aremade before the publication of thisinformation.

At least one month�s advance notice is givenof changes in the methodology: toparticipants in the Latvian CentralDepository in written form, to the public viathe Latvian Central Depository�s website


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(www.lcd.lv) and to the media. Informationabout changes in the methodology is alsoprovided when the data compiled on thebasis of the new method are first published.

There are no breaks in series of governmentsecurities issues statistics.

The Bank of Latvia has made minor changesto statistics on holders of governmentsecurities, which has not caused any breaksin series. Previously, collateral in repooperations was classified as a bank�s holdingof securities, while it is currently classified asthe Bank of Latvia�s holding.

3.3.3 Revisions

The Financial and Capital Market Commissionrevises information on each occasion beforeits publication.

Aggregated data on the value (capitalisation)of securities deposited with the LatvianCentral Depository, which are compiled onthe first working day after the close of thereporting period, are revised to reflectchanges in the market value of securities.The final data are then sent to participantsof the Latvian Central Depository and themedia, and are placed on the Latvian CentralDepository�s website. Explanatory notes aregiven in respect of revisions at the time ofpublication of the revised data.

The Bank of Latvia does not revise statisticson issues and holders of governmentsecurities, because the data are matched withtotal issues and are published afterwards.

3.4 Publications


Since 1995, information concerning individualissues of securities in public circulation hasbeen published immediately after theregistration of the issue by way of submittingthis information to news agencies and by

putting it on the Financial and Capital MarketCommission�s website (www.fktk.lv).

The Latvian Central Depository publishesdata on the end-of-period market value ofsecurities deposited with the Latvian CentralDepository. This information is based on datarecorded in the Latvian Central Depositorydatabase. Information is published on thewebsite of the Latvian Central Depository(www.lcd.lv) and sent to the Latvian CentralDepository participants and the media. Thedata are published no later than on the fifthworking day after the close of the respectivereporting period (month, quarter and year).

Data on central government securitiesauctions are first released on the Bank ofLatvia�s website (www.bank.lv) and onReuters at 10 a.m. (local time) everyThursday (the day after the weekly auction)for the weekly data on discount rates ofTreasury bills and fixed income rates ofTreasury bonds.


The Latvian Central Depository alsopublishes statistics on securities transactionsconcluded on the OTC market. Thisinformation is based on data recorded in theLatvian Central Depository database.Information is sent to the Latvian CentralDepository participants and the media, andis published on the website of the LatvianCentral Depository on a quarterly basis. Thedata are published no later than on thesecond working day after the close of therespective reporting period (week, month,quarter and year).

The Latvian Central Depository alsopublishes statistics on the structure ofsecurities owners. This information is basedon data provided by the Latvian CentralDepository participants - banks andbrokerage companies. Information is sent tothe Latvian Central Depository participantsand the media, and is published annually inelectronic form on the website of the Latvian


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Central Depository. The data are publishedno later than on the 30th working day afterthe close of the reporting year.

The quarterly Monetary Review of the Bankof Latvia is used to publish more detailedmonthly data on statistics on centralgovernment securities issues, disclosing dataon the following:

� maturity;

� number of auctions;

� number of participants;

� supply (in thousands of lats);

� demand (in thousands of lats);

� issue (in thousands of lats); and

� weighted average discount rate (includingfixed income rate).

Moreover, the Bank of Latvia publishes dataon every auction of Treasury bills for theprevious quarter, disclosing data on thefollowing:

� maturity;

� date of issue;

� number of participants;

� demand (in thousands of lats);

� purchases (in thousands of lats); and

� weighted average discount rate.

The Bank of Latvia also releases data onholdings of government securities, brokendown by holder (Bank of Latvia, residentcredit institutions, public/private enterprisesand other residents). Non-resident holdersof government securities are divided into twogroups: OECD country banks and OECDcountry enterprises.

The publication is available to the public inLatvian and English three months after thereporting quarter in hard copy and on theBank of Latvia�s website.

3.5 Users

The main users of statistical data collectedby the Bank of Latvia, the Latvian CentralDepository and the Financial and CapitalMarket Commission are securities marketprofessionals, professional economists, themedia and the general public.



4.1.1 Definitions

Although the period from 1997 until 2001was characterised by increasing activity ofcredit institutions in the OTC market forfinancial derivatives, the main financialderivative instruments used were foreignexchange swaps and forward transactions.The Bank of Latvia does not compile detailedstatistics on the financial derivatives market;however, some data on financial derivativesappear in credit institutions� balance sheets,

and the reporting form on currencypurchases and sales shows the main financialinstruments in the foreign exchange market.

The Financial and Capital Market Commissionfollows the development of financialderivatives transactions used by creditinstitutions. In accordance with theRegulations on Capital AdequacyRequirements adopted by the Financial andCapital Market Commission, financialderivatives are agreements concluded on thebasis of a real or notional asset (hereinafter,an underlying asset) whose value depends on


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changes in interest rates, exchange rates,share prices, stock indices, commoditiesprices and other similar factors from the dayof signing the agreement to that of itsexecution. Financial derivatives require noinitial investment or little initial investmentin comparison with other types of contractsthat are similarly related to changes in marketconditions. A derivative contract is settledon a future date. These general featurescharacterising financial derivativescorrespond to the definition of financialderivatives used in International AccountingStandard (IAS) No. 39 (1998).

The description of the broad categories offinancial derivatives by the Financial andCapital Market Commission is as follows:

Options are financial derivatives establishingliabilities for their seller and entitling (butnot obliging) the buyer to buy (call option)or sell (put option) a contracted amount ofunderlying assets for an agreed price at anytime between the date of concluding theagreement to that of its expiry (Americanoption) or on the date of the agreement�sexpiry (European option).

Forward rate agreements are financialderivatives involving the payment ofcompensation to either party of theagreement when the market interest ratefor the underlying debt security differs fromthe contracted interest rate on an agreeddate.

Futures and forward contracts are financialderivatives establishing a liability to sell orbuy a contracted amount of the underlyingasset for an agreed price on an agreed date.

No special definition is envisaged forstructured notes in the Regulations onCapital Adequacy Requirements, as thisinstrument is not typical of the Latvianfinancial derivatives market.

Swaps are OTC derivatives involving theexchange of cash flows between two parties

in an agreed period. The amount of said cashflows depends on the notional principal ofthe derivative instrument.

The definition of swap transactionsconducted by the Bank of Latvia is as follows:

A short-term currency swap transaction is adeal between the Bank of Latvia and acounterparty participating in a tender ofshort-term currency swaps whereby thecounterparty buys from or sells to the Bankof Latvia lats for foreign currency at the spotexchange rate of the deal on condition thatthese lats will be resold or repurchased uponmaturity of the deal at the forward exchangerate of the deal. Counterparties are banksor branches of foreign banks registered inthe Republic of Latvia, as well as foreignbanks and international monetary, financialor credit institutions holding a settlementaccount in lats with the Bank of Latvia.


Statistics on swap operations are importantfor monetary policy analysis, because theyprovide a better understanding of moneymarket rates and banks� willingness toincrease/decrease their net open foreignexchange position. The data on financialderivatives transactions derived from creditinstitutions� balance sheets and the reportingform on currency purchases and sales allowsthe Bank of Latvia to follow the developmentof new financial instruments used by banks.

The Financial and Capital Market Commissionuses data on financial derivatives to dischargeits supervisory function. Since capitaladequacy covers risks inherent in derivativeinstruments, the Financial and Capital MarketCommission uses these data to monitorwhether credit institutions comply with therelevant requirements.


Latvia


The Law on State Statistics defines theorganisation of state statistics in the Republicof Latvia and authorises the Bank of Latvia tocollect data for monetary and bankingstatistics purposes, as well as for thecompilation of the balance of payments.7

In accordance with paragraph 2 of Article 7of the Law on the Financial and CapitalMarket Commission,8 the Financial andCapital Market Commission has the right torequest and receive the necessary informationfrom financial and capital market participants.



The Monthly Financial Position Report ofcredit institutions, which includes a positionon financial derivatives on both the asset andthe liability side, are submitted to the Bankof Latvia on a monthly basis. The reportingcoverage is 100%. Credit institutions alsosubmit the Report on Foreign ExchangeTransactions, which comprises data onfinancial derivatives. The reporting coverageis also 100%.

Likewise, all credit institutions operating inLatvia submit their calculation of their capitaladequacy ratio to the Financial and CapitalMarket Commission. Financial derivatives areonly traded on the OTC market, and theRiga Stock Exchange does not provide fortrading in derivative contracts. Creditinstitutions use foreign stock exchanges forfinancial derivative trades.

Data are reported directly to both theFinancial and Capital Market Commission andthe Bank of Latvia.

Data on banks� forward quotations of euroand US dollar exchange rates vis-à-vis latsare available from Reuters.

4.2.2 Collection schemes

Until the end of 2001, credit institutionswere required to show claims and liabilitiesarising from derivative contracts as off-balance-sheet items in the Monthly FinancialPosition Report. Since 1 January 2002, bankingand monetary statistics have been compiledusing new statistical reports for creditinstitutions. At present, financial derivativeshave an asset and a liability side position inthe Monthly Financial Position Report.

The asset side position of financial derivativesis described as follows:

Financial assets resulting from valuing financialderivatives at their fair value, i.e. the positivevalue of each individual financial derivative,shall be reported under this item. The marginto be repaid under a contractual agreementshall be reported under �Claims on creditinstitutions and foreign central banks� or�Loans�, whereas securities encumberedunder such transactions shall be reportedunder �Debt securities�.

The liability side position of financialderivatives is described as follows:

Financial liabilities resulting from valuingfinancial derivatives at their fair value, i.e.,the negative value of each financial derivative,shall be reported here. Margins that arereceived from customers and are to be repaidunder a contractual agreement shall bereported under �Liabilities to credit institutionsand foreign central banks� or �Deposits�.

In the Monthly Financial Position Report, dataon the asset and liability positions of financialderivatives are available broken down byresidents and non-residents and, in addition,by currency (national currency, currenciesof OECD countries and other foreigncurrencies).

7 See: www.csb.lv/Satr/alik.htm and Section 2 of the countrychapter on “Latvia” in “Money and banking statistics in theaccession countries: Methodological manual”.

8 See: www.fktk.lv.


Latvia

Credit institutions submit the MonthlyFinancial Position Report to the Bank ofLatvia in electronic format using theinterbank data transmission network. Dataare stored by means of the Microsoft SQLserver 2000.

The Report on Foreign ExchangeTransactions of credit institutions containsdata on foreign exchange forward and swaptransactions. Items denominated in foreigncurrencies are translated into lats using theend-of-period exchange rates quoted by theBank of Latvia. Where the exchange rate ofa currency is not quoted by the Bank ofLatvia, it is calculated using the exchangerate of the US dollar as quoted by the Bankof Latvia on the last day of the month andthe exchange rate of the relevant currencyvis-à-vis the US dollar at the close of businessof the New York Stock Exchange.

The currency breakdown used for the itemsin the Report on Foreign ExchangeTransactions is as follows:

� OECD countries; and

� other foreign countries.

The counterpart breakdown used for theitems in the Report on Foreign ExchangeTransactions is as follows:

� residents/non-residents;

� credit institutions; and

� non-banks.

Credit institutions submit data to the Bankof Latvia in hard copy. Data are inputelectronically to obtain a version of thereports in the Microsoft Excel 2000environment and are stored by means of theMicrosoft SQL server 2000.

The calculation of the capital adequacy ratioincludes information on the notional amountof OTC derivatives (with the exception offinancial derivatives denominated in foreign

currencies and having an original maturity ofup to 14 days). When providing saidinformation, financial derivatives are dividedup according to their type (interest rate,foreign exchange, gold, equity securities andprecious metals (except gold) derivatives, aswell as derivatives of other commodities)and the term of execution (by residualmaturity: up to one year, one to five yearsand over five years).

Credit institutions submit data on theircapital adequacy ratio to the Financial andCapital Market Commission in hard copy.Data are input electronically to obtain aversion of the reports in the Microsoft Excel2000 environment and are stored by meansof the Microsoft SQL server 2000.

Currently, the Bank of Latvia and theFinancial and Capital Market Commission areworking on a new reporting form on financialderivatives.


The Monthly Financial Position Report has tobe submitted to the Bank of Latvia within sixworking days of the end of the reportingperiod. Preliminary aggregated data areavailable on the ninth working day after theend of the reporting period. The final dataare disseminated to the public on the 18thworking day after the end of the reportingperiod.

The Report on Foreign ExchangeTransactions has to be submitted to the Bankof Latvia on the seventh day after the end ofthe reporting month and aggregated data areavailable on the 17th day after the end of thereporting month.

The Financial and Capital Market Commissionreceives the calculation of capital adequacyfrom banks as on the last day of the monthby the 15th day of the following month.


Latvia



Data disclosed in the Monthly FinancialPosition Report are end-of-period data. Avaluation is carried out according to marketvalues.

The Report on Foreign ExchangeTransactions contains turnover data.

The calculation of capital adequacy reflectsthe situation as on the last day of a particularmonth. Data are given on a stock basis. Avaluation is carried out according to marketvalues.


No breaks in series have occurred for dataon financial derivatives because the series isstill too short.

The Bank of Latvia�s policy for adjusting timeseries is to adjust past series where dataallow this, while no adjustments are madefor past periods in other cases whereadjustments are difficult, and data remainincomparable. The breaks are highlighted infootnotes.

4.3.3 Revisions

Preliminary aggregated data from the MonthlyFinancial Position Report of creditinstitutions, which are available on the ninthworking day after the close of the reportingperiod, may be revised as proposed by creditinstitutions.

If revisions are made after the monthlypublication, they are reported as such andare accompanied by explanatory notes.Quarterly data published in the quarterlyMonetary Review are final.

At least one month�s advance notice is givenof changes in the methodology via the Bankof Latvia�s website. Information aboutchanges in the methodology is also providedwhen the data compiled using the newmethod are first published.

Capital adequacy calculations by banks areverified by the Financial and Capital MarketCommission�s off-site supervisors, whodetect errors in the calculation and notifythe bank of such errors; subsequently, thebank makes the appropriate corrections.

4.4 Publications


Information on the financial derivativesincluded in the calculation of capital adequacyis used for the Financial and Capital MarketCommission�s internal purposes and is notpublished.

Data on foreign exchange swap auctionsorganised by the Bank of Latvia aredisseminated weekly on the Bank of Latvia�swebsite (www.bank.lv).

The financial derivative asset and liabilitypositions are not stated separately whenpublished in the monthly Monetary Bulletinas part of the data of the consolidatedbalance sheet of credit institutions, but areincluded in credit institutions� other assetsand other liabilities. This is because thefinancial derivatives market in Latvia is notbroadly developed.

Statistics on principal foreign exchangetransactions in the banking sector, includingforward transactions and swaps, arepublished in the quarterly Monetary Review.

The publication is available to the public inLatvian and English three months after theend of the reporting quarter in hard copyand on the Bank of Latvia�s website.


Latvia


None.

4.5 Users

Financial derivatives data are mainly used bythe Financial and Capital Market Commission

for supervision purposes (to reduce the risksinherent in derivative contracts beingincluded in the trading books of banks).

Data on foreign exchange derivatives areused by the Bank of Latvia and the generalpublic to follow the development of financialinstruments that are new for the Latvianfinancial market.


5.1.1 Definitions

In Latvia, interest rate statistics cover thoseinterest rates that banks, foreign bankbranches and credit unions apply to newlygranted loans and newly attracted depositsof resident and non-resident enterprises andprivate individuals. The interest ratesreported are weighted average interest rates.


Retail interest rates play an important rolein evaluating the effectiveness of monetarypolicy and the development of the nationaleconomy. Data on interest rates are neededto monitor the transmission of monetarypolicy. Likewise, retail interest rate statisticsare used to analyse inflation expectations andinterest rate spreads by maturity, and tocompare retail interest rates with interestrates of other financial market instruments.

The Bank of Latvia uses interest rate statisticsto assess money demand and lending costs,and for the purposes of macroprudentialanalysis.


The Law on State Statistics defines theorganisation of state statistics in the Republic


of Latvia and authorises the Bank of Latvia tocollect data for money and banking statistics,as well as for compiling the balance ofpayments (Articles 4 and 7).

In accordance with Article 39 of the Law onthe Bank of Latvia, the Bank of Latviaapproves statistical reporting forms and theprocedures for submitting such reports.Article 40 of the Law obligates the Bank ofLatvia to collect, register and compilefinancial and balance of payments statistics,as well as publish the compiled statistics.9

The Executive Board of the Bank of Latviaadopted the Report on Interest Rates andVolumes of Non-bank Loans and Deposits in1993 (amended in 1997).



All credit institutions (banks and foreign bankbranches) and credit unions that operateunder licences issued by the Financial andCapital Market Commission and takedeposits from and/or grant loans to residentand non-resident enterprises and privateindividuals are required to submit the Reporton Interest Rates and Volumes of Non-bankLoans and Deposits, regardless of the scopeof their activities in the financial market. Thebusiness volume coverage is 100% of all newloans and deposits.


Latvia

The Bank of Latvia requires credit institutionsto compile the reporting form on interestrates, also including data on their domesticbranches. Data from branches operatingoutside Latvia are not included.


The reporting coverage is 100% of Latviancredit institutions and credit unions, and theReport on Interest Rates and Volumes ofNon-bank Loans and Deposits reflects theturnover of funds, i.e. only newly grantedloans or newly attracted deposits (exception:demand deposits).

The counterpart breakdown used for theitems in the Report on Interest Rates andVolumes of Non-bank Loans and Deposits isas follows:

� residents:

� enterprises, and

� private individuals; and

� non-resident enterprises and privateindividuals.

The currency breakdown of items is asfollows:

� national currency;

� OECD country currencies; and

� other currencies.

The maturity shown is the original maturity.Each maturity is stated inclusive of its upperlimit. For example, loans/deposits with amaturity of over one month and up to threemonths include loans/deposits with a maturityof three months.

The maturity breakdown of loans is asfollows:


� over one month and up to three months;

� over three months and up to six months;

� over six months and up to one year;

� over one year and up to five years; and


The maturity breakdown of deposits is asfollows:

� demand;





� over one year and up to five years; and


The reported interest rates are the annualrates agreed between the reportinginstitution and a customer, and they do notinclude costs relating to administration, creditinsurance and other related charges.

The interest rate breakdown is as follows:

� the weighted average (see Section 5.3.1);

� the minimum rate (the lowest interestrate in the single currency and maturitycategory); and

� the maximum rate (the highest interestrate in the single currency and maturitycategory).

9 See: www.bank.lv/about/English/index.html.


Latvia

The methodological rules are as follows:

� The volume of demand deposits must bereported as the total of the average end-of-day balances on all current and debitcard accounts (previously and newlyopened) during the reporting period. Theweighted average rate of demanddeposits must be calculated on the basisof the average end-of-day balances ofthese accounts during the reportingperiod.

� Credit lines must appear in the report asloans with a maturity set by the contract.When recording the volume of a creditline, the amount actually granted overthe reporting period, not the total agreedon in the contract, must be reported.

� Where the term of the contract isextended, the interest rate and volumeof the loan or deposit must be reportedanew, reflecting changes in the contract.

� Items denominated in foreign currenciesmust be converted into lats, using theend-of-period exchange rates quoted bythe Bank of Latvia. Where the exchangerate of a currency is not quoted by theBank of Latvia, it must be calculated onthe basis of the exchange rate of the USdollar quoted by the Bank of Latvia onthe last day of the month and theexchange rate of the relevant currencyvis-à-vis the US dollar at close of businessat the New York Stock Exchange.

Reporting institutions submit data in hardcopy. Data are input electronically to obtaina version of the reports in the MicrosoftExcel 2000 environment and are stored bymeans of the Microsoft SQL server 2000.


Credit institutions and credit unions submitreports relating to interest rate statistics ona monthly basis, no later than on the fifth

day after the end of the reference month.Aggregated data are available on the thirdbusiness day after the reporting date.



The reported interest rates are weightedaverage interest rates. Credit institutions andcredit unions must calculate interest ratesfor reporting purposes, using the followingformula:

V1*R1 + V2*R2 +...Vn*Rn

where:

RW is the weighted average rate;

Vi is the volume of the i-th new loan (ordeposit); i = 1, 2, ... n;

is the total volume of all new loans (ordeposits); and

Ri is the annual interest rate of the i-thnew loan (or deposit) agreed betweenthe reporting institution and anenterprise or a private individual.


The Bank of Latvia began collecting interestrate statistics in January 1994. In 1997, whennew reporting requirements regarding creditinstitutions� balance sheets were introduced,reports on interest rate statistics wererevised. Revisions were made in the foreigncurrency breakdown, leaving the instrumentand sectoral breakdowns untouched. Timeseries for the main data categories were notinterrupted. Since the interest rates reportedare weighted average interest rates, there isno need to adjust interest rates should the

RW =∑ V

∑ V


Latvia

reporting population change because of theclosure of banks.

5.3.3 Revisions

Preliminary aggregated data on interest ratestatistics, which are compiled on the thirdbusiness day after the reporting day (usuallythe 13th or 14th of the month), may berevised as proposed by a credit institutionor a credit union by the last business day ofthe month following the reference month.The final data are the data included in themonthly Monetary Bulletin.

If revisions are made after the monthlypublication, they are reported in the nextpublication and marked as revised data.

5.4 Publications


Data on interest rates cover interest rateson the following transactions in lats and inOECD country currencies by domesticenterprises and private individuals: short-term and long-term loans, demand depositsand short-term and long-term deposits.These data are first released via the Bank ofLatvia�s website (www.bank.lv) on a monthlybasis within a week after the aggregated databecome available (usually on the 21st or the22nd of the month). They are also publishedin the monthly Monetary Bulletin, which isavailable to the public in Latvian and English40 days after the end of the reporting monthin hard copy and on the Bank of Latvia�swebsite.


The quarterly Monetary Review is used topublish more detailed monthly retail interestrate statistics on credit institutions� domestictransactions in lats and in OECD countrycurrencies, stating separately transactions

with domestic enterprises and transactionswith private domestic individuals.

The maturity breakdown of loans is as follows:





� short-term (in the aggregate); and


The maturity breakdown of deposits is asfollows:





� short-term (in the aggregate); and


The publication is available to the public inLatvian and English three months after theend of the reporting quarter in hard copyand on the Bank of Latvia�s website.

5.5 Users

The Bank of Latvia is the main user of retailinterest rate statistics. The Bank of Latviahas concluded an agreement on the exchangeof information on retail interest rate statisticswith a number of institutions, including theMinistry of Finance, the Financial and CapitalMarket Commission and the CentralStatistical Bureau of Latvia. The InternationalMonetary Fund, Eurostat and internationalrating agencies are also among the users ofretail interest rate statistics.


Latvia


Mrs. Zigrida AustaHead of Banking and Monetary StatisticsDivisionStatistics DepartmentPhone: +371 7022 449e-mail: [email protected]

6 Contacts at the Bank of Latvia

Mrs. Jelena ZubkovaHead of Financial Market Analysis DivisionMonetary Policy DepartmentPhone: +371 7022 425e-mail: [email protected]


Latvia

Lithuania


Lithuania


CSD Central Securities Depository

EUR euro


LSC Lithuanian Securities Commission

LTL Lithuanian litas



NSEL National Stock Exchange of Lithuania



USD US dollar

VILIBID Vilnius interbank bid rate

VILIBOR Vilnius interbank offered rate


Lithuania


1.1.1 Introduction

In Lithuania, the �financial corporations�sector (S12) consists of all corporations andquasi-corporations engaged mainly in financialintermediation (financial intermediaries) and/or auxiliary financial activities (financialauxiliaries).

This sector includes the Bank of Lithuania,deposit money banks, other bankinginstitutions (e.g. credit unions) and non-bankfinancial institutions.1 The latter consist ofother financial intermediaries, financialauxiliaries (e.g. stock brokerage companies,including those operating for their ownaccount, the National Stock Exchange ofLithuania (NSEL), insurance brokers, etc.) andinsurance corporations.

The main difference between other financialintermediaries (OFIs) and other monetaryfinancial institutions (MFIs) is that OFIs donot receive deposits and/or close substitutesfor deposits from institutional units otherthan MFIs. Furthermore, OFIs do not incurliabilities in the form of technical insurancereserves, so that they differ from insurancecorporations and pension funds.

The OFI sub-sector, excluding insurancecorporations and pension funds (S123),consists of investment companies andfinancial leasing corporations but not stockbrokerage companies (which operate fortheir own account). The national statisticaloffice - Statistics Lithuania - collects data onOFIs (balance sheet items, profit-and-lossaccount items and some other additionalinformation) for purposes of nationalaccounts statistics.

1.1.2 Definitions

According to the Law on InvestmentCompanies, as amended in 1999, an

investment company is a stock companywhich accumulates the funds of natural andlegal persons by way of public offerings of itsown shares and for which at least one of thefollowing is true: (i) investment andreinvestment in securities and/or trading insecurities constitutes the principal activity,generating more than 60% of the company�sincome; and (ii) securities represent morethan 50% of the company�s property value.

Investment companies, which are supervisedby the Lithuanian Securities Commission(LSC), may belong to one of the followingcategories: (i) investment funds, (ii) closed-end funds, or (iii) investment holdingcompanies. According to the aforementionedlaw, an investment fund is an investmentcompany that holds a diversified investmentportfolio and that has issued or is issuingshares which are redeemable by their holdersfor a proportionate share of the company�sown (net) assets. A closed-end fund is aninvestment company that has a diversifiedinvestment portfolio and that has not issuedredeemable shares. An investment holdingcompany is an investment company that hasan investment securities portfolio, which isnot diversified, and that has not issuedredeemable shares.

There is no special legislation on financialleasing companies, which are not defined inlaw, have no supervisory body to overseethem, and operate according to the Law onCompanies. Commercial banks are parententerprises of the largest financial leasingcompanies.


The Bank of Lithuania regularly analyses thestructure and developments of the financialsector. Leasing statistics are used for the


1 See Table 3 in the country chapter on “Lithuania” in themanual on “the current definition and structure of money andbanking statistics in the accession countries" (MethodologicalManual - Volume I).


Lithuania

analysis of domestic credit developments andalternative financing methods. OFI statisticsare also used for the implementation ofproper actions in supervision (consolidatedsupervision and co-operation betweensupervisory institutions).


The Law on Statistics2 authorises StatisticsLithuania to collect data from all institutionalunits, including OFIs. A reporting scheme ismandatory for all nationally specifiedcategories of OFI, and the data are collectedfor purposes of national accounts statistics.



No nationally specified categories of OFI areexempt from reporting. Statistics Lithuaniacollects data from all investment companiesand financial leasing companies. Enterprisesunder liquidation are also included.

2 See www.std.lt for the text amended in 1999.


Investment companies provide annualstatistical reports, based inter alia oncompany balance sheets, to StatisticsLithuania. Some additional variables necessaryfor national accounts statistics are includedin the statistical questionnaire. A breakdownby sectors of investment activity is available.

Leasing companies provide annual andquarterly statistical reports to StatisticsLithuania. Annual reports are based, interalia, on company balance sheets. Someadditional variables necessary for nationalaccount statistics are included in thestatistical questionnaire.

Accounting and recording practices are basedon International Accounting Standards (IAS).


Investment companies report annually, 15days after the end of the reporting period(financial year).

Leasing companies report annually (on 3April) and quarterly (25 days after the end ofthe reference period).



No adjustments are made for any type ofbreak in series.

1.3.2 Revisions

There are no specific rules used for revisions,which are due to errors.

TableReporting coverage of OFI statistics in Lithuania

Type of reporting institution Number of institutions Total assets (%)

Investment companies 20 21.9Financial leasing companies 17 78.1

Total 37 100.0


Lithuania

1.4 Publications

Statistics Lithuania publishes the annual dataon OFIs in the statistical bulletin �Finance ofFinancial Enterprises� and in the �StatisticalYearbook of Lithuania�. The sources ofinformation are statistical surveys. Publicationincludes data on balance sheets and somevariables related to those accounts. Thebulletin is published every July, and theYearbook every autumn. The Yearbook isalso available on CD-ROM.

1.5 Users

Statistics Lithuania, the Bank of Lithuania,the Ministry of Finance (MoF), the LSC andacademic institutions are the main users ofstatistical data on OFIs. Data on OFIs arecollected for purposes of national accountsstatistics in order to make the data availableto the public.


2.1.1 Definitions

Money market statistics cover the following:

� short-term debt securities, which aremarketable debt instruments with anoriginal maturity of one year or less andinclude State Treasury bills denominatedin national currency, sold by auction;

� data on interbank money deposits(interest rates and volumes of deposittransactions), broken down by currency(EUR, LTL, USD, and combinations ofother foreign currencies), bycounterparty (residents, non-residents),and by maturity (one day, two to sevendays, eight days to one month, one tothree months, three to six months andover six months); and

� interbank market interest rates, namelythe Vilnius interbank bid rate (VILIBID)and the Vilnius interbank offered rate(VILIBOR) (for overnight, one-week,two-week, one-month, three-month, six-month and one-year money).

Capital market statistics cover the following:

� long-term debt securities, which aremarketable debt instruments, notablygovernment bonds denominated in


national currency, sold by auction withan original maturity of more than oneyear;

� indices summarising the results ofsecurities trading on the NSEL, namelythe LITIN, which includes only OfficialList shares, the LITIN-G, whichcomprises all listed shares, and theLITIN-10, which is based on the top tenshares that are traded most actively onthe NSEL;

� NSEL�s market capitalisation, which iscalculated for listed securities (shares andgovernment debt securities), unlistedsecurities (shares and corporate debtsecurities), and the total capitalisation ofthe NSEL. The capitalisation of listedsecurities is broken down into thecapitalisation of Official List securitiesand the capitalisation of current listsecurities; and

� end-of-period data on the securities(including government debt securities)held by groups of investors, broken-downby economic activity and country.

Foreign exchange market statistics comprisedata on volumes of commercial banks� foreigncurrency purchase and sale contracts forspot, forward outright, swap and optiontransactions (see Sub-section 4.1.1). Foreignexchange market statistics are broken down


Lithuania

by currency, counterparty (banks, non-banks,residents and non-residents) and maturity ofcontract.


Financial market statistics are necessary toanalyse and forecast the results of monetaryand fiscal policy actions, to monitor financialflows within the economy and the impact ofthe financial sector on economic activity, toevaluate potential systemic risks and toimplement adequate supervisory actions inorder to safeguard financial stability.

Data on shares and government debtsecurities held (at market value) by groupsof investors are used to compile the balanceof payments.


The Law on the Bank of Lithuania3 empowersthe NCB to collect financial and relatedstatistics. Similarly, the Law on Statisticsempowers government ministries, other stateand local autonomous institutions, agenciesand organisations, as well as the Bank ofLithuania, to collect data for official statistics.



� The Bank of Lithuania compiles data ongovernment debt securities sold byauction, as taken from the governmentdebt securities register.

� Interbank money deposit statistics coverall operating commercial banks andforeign bank branches.

� The VILIBID and VILIBOR rates arebased on the quotes of no fewer than

five banks, designated by the Bank ofLithuania, which are most active in theLithuanian money market.

� Data on equity indices and marketcapitalisation are provided by the NSEL.

� The Central Securities Depository (CSD)supplies data on securities investors.

� Foreign exchange statistics cover alloperating commercial banks and foreignbank branches.


� The data source for government debtsecurities is an electronic governmentdebt securities register (see Sub-section3.2.2.).

� In the case of interbank deposit statistics,reporting agents provide weekly data onall interbank deposit transactionsconcluded during the reference week,including the number of transactions,broken down by currency, counterparty,maturity and rate of interest.

The VILIBID and VILIBOR rates arecalculated every business day at 11 a.m. (localtime). The highest and lowest rates areeliminated and an arithmetic mean of theremaining quotes is calculated. Maturities areas follows: overnight, one week, two weeks,one month, three months, six months andone year.

The NSEL calculates equity indices everytrade session. The LITIN and LITIN-G indicesare price-based, capitalisation-weightedindices. The methodology used for theircalculation is based on the InternationalFinance Corporation�s recommendation forindices of emerging markets. The NSEL�sTop-10 share equity index, the LITIN-10, isa market price index.

3 See www.lb.lt for the text revised in 2001.


Lithuania

Capitalisation of listed securities is based onthe market price, whereas the capitalisationof unlisted securities is based on the nominalvalue.

The Bank of Lithuania uses data on equityindices and market capitalisation, which areavailable on the NSEL�s website.

The Bank of Lithuania collects monthly andquarterly statistical data on securities heldby groups of investors, using Excelspreadsheets.

The Bank of Lithuania collects weekly dataon volumes of commercial banks� foreigncurrency purchase and sale contracts. Thedata are collected electronically inaccordance with the Bank of Lithuania�smethodological guidelines.


The time series of government debtsecurities data starts in July 1994. Data arereported on the day of the auction, usuallyheld weekly, at about 12 noon (local time)(see Sub-section 3.2.3).

Data on government debt securities inforeign markets have been collected sinceDecember 1995.

The time series for interbank deposits startsin January 1998. Data are currently collectedon a weekly basis (although data werecollected monthly until December 1998).Data have to be submitted to the Bank ofLithuania in electronic format by 2 p.m. (localtime) every Monday.

The Bank of Lithuania has been calculatingthe VILIBID and VILIBOR rates since January1999.

The LITIN-G time series starts in January1996. The index is currently calculated eachtrading day, although it was calculated twice

a week until June 1998. In the case of theLITIN and the LITIN-10 indices, the timeseries start in April 1997 and January 1999respectively.

The time series for share capitalisation startsin September 1993, that for the capitalisationof government debt securities in December1994, and that for the capitalisation of listedsecurities broken down by NSEL trading listin July 1998. The frequency of data is daily,monthly, quarterly, and annual; daily valuesare made available one hour after the tradingsession, while monthly, quarterly and annualvalues are available after the trading sessionon the last day of the reference period.

The Bank of Lithuania collects monthlystatistical data on securities investors 20 daysafter the end of the reference month, andquarterly data within one month after theend of period of the reference quarter. Thetime series for investors in government debtsecurities starts in July 1994, while that forshare investors starts in January 1996.

Data on the purchase and sale of foreigncurrencies have been collected weekly, by 1p.m. (local time) every Tuesday, since January1996 (see Sub-section 4.2.3).



Data on government debt securities arecollected on the auction date, immediatelyafter the auction has taken place. Varioustypes of aggregated data are available (seeSub-section 3.2.3).

VILIBID and VILIBOR - the highest andlowest rates of the quoting banks areeliminated and an arithmetic mean of theremaining quotes is calculated.

The interbank deposit statistics comprisedata on commercial bank transactions during


Lithuania

the reporting period. A weighted average ofinterbank deposit rates is calculated.

Capitalisation-weighted LITIN and LITIN-Gindices are calculated by the NSEL after everytrading session. Until 29 December 2000,the indices were calculated on the basis ofthe weighted average share price of thetrading session. However, since the beginningof January 2001, they have been computedon the basis of the closing price. The LITIN-10 price index is calculated during continuoustrading at the NSEL; the last value of the dayis regarded as the official value for the day.

Market capitalisation data and data onsecurities investors are end-of-period data.

Foreign exchange market statistics comprisedata on commercial banks� currencypurchases and sales during the reportingperiod (see Sub-section 4.2.2).


There have not been any breaks in the timeseries of data on government debt securities,on interbank deposit statistics and on theVILIBID and VILIBOR.

Breaks in the equity index series are causedby changes in methodology. Until 29December 2000, for example, the LITIN andLITIN-G indices were calculated on the basisof the weighted average share price of thetrading session; since January 2001, however,they have been computed on the basis of theclosing price.

The LITIN and LITIN-G indices are calculatedusing an adjustment factor, which ensuresindex continuity after any changes are madeto the composition of the index.

Changes in the methodology have not hadany significant impact on the time series ofindices, so that no adjustments have beenmade.

There were no breaks either in the timeseries of market capitalisation data or in thetime series of securities investors� data.

The introduction of the new reportingsystem in January 1999 caused a break in thecontinuous time series of foreign exchangemarket statistics. Historical data were notrevised.

2.3.3 Revisions

Financial market statistics are final when firstreleased. There are no specific rules forrevisions, although - in the event of changes- revised data are highlighted in explanatoryfootnotes.

2.4 Publications


The first release and main publication of dataon government debt securities are describedin Sub-section 3.4.1.

VILIBID/VILIBOR data:

� Source: Reuters and the Bank ofLithuania.


� Medium of publication: first releasedelectronically by 12 noon (on Reuters��LTBANK08� page and on the Bank ofLithuania�s website), but subsequentlypublished in hard copy in the Bank ofLithuania�s Monthly and QuarterlyBulletins. Monthly Bulletins are publishedwithin a period of one month after theend of the reference period, whilepublication of Quarterly Bulletins iswithin a period of two months.

Interbank money deposit statistics andforeign exchange market statistics:

� Source: Bank of Lithuania.


Lithuania

� Frequency of publication: weekly andmonthly.

� Medium of publication: first published inelectronic format (on the Bank ofLithuania�s website).

Equity indices data:

� Source: NSEL.


� Medium of publication: published inelectronic format (on Reuters,Bloomberg, Telerate, Telekurs, andThomson Financial Datastream, on theNSEL�s internet website (www.nse.lt) andon the Bank of Lithuania�s internetwebsite) and in hard copy in the�Financial Times�. The NSEL�s equityindices are also published in the NSEL�sMonthly and Quarterly Bulletins(available both in hard copy and on theNSEL�s website).

Market capitalisation data:

� Source: NSEL.

� Frequency of publication: Daily

� Medium of publication: published inelectronic format (on the NSEL�swebsite).

Government debt securities issues statistics,i.e. data on government debt securities (atnominal value) held by groups of investors,as well as interbank deposit statistics andcommercial banks� foreign exchange statisticsare published in the Bank of Lithuania�sMonthly and Quarterly Bulletins (available inhard copy). Monthly Bulletins are publishedwithin a period of one month after the endof the reference period, while publication ofQuarterly Bulletins is within a period of twomonths.


The Bank of Lithuania publishes data ongovernment debt securities, interbankdeposit statistics, the NSEL�s equity indicesand market capitalisation in the BankingStatistics Yearbook (available in hard copy)in June.

The NSEL�s equity indices are published inthe NSEL�s Annual Report (available both inhard copy and on the NSEL�s website).

2.5 Users

The Bank of Lithuania, the MoF, internationalratings agencies, Statistics Lithuania, the LSC,the CSD, financial institutions, investors andacademic institutions are the main users offinancial market data.


3.1.1 Definitions

Securities issues statistics cover governmentdebt securities, corporate debt securities andequities issued by public companies.

Government debt securities are thoseliabilities of the government issued in serieson behalf of the state. They may take thefollowing forms:


� State Treasury bills, i.e. securities which havean original maturity of one year or less;

� government bonds, i.e. securities whichhave an original maturity of more thanone year;

� Savings notes, i.e. securities issued otherthan by auction and sold solely to naturalpersons in the primary market;


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� government debt securities issued forspecial purposes, such as settlementswith creditors (legal persons andcompanies not having the status of a legalpersons) of the bank in the event ofbankruptcy; or

� government debt securities issued ininternational financial markets, which aredebt instruments issued in series by thegovernment on behalf of the state ininternational financial markets indomestic or foreign currency.

Treasury bills, government bonds, eurobonds,government debt securities issued for specialpurposes and government debt securitiesissued in international financial markets areall negotiable.

Savings notes are not negotiable.


Debt and equity securities issues arealternatives to bank financing. These statisticsare therefore important for the analysis ofthe financial sector�s contribution toeconomic growth. Primary debt marketinformation (interest rates, cover andvolumes) is used by the MoF for debtmanagement purposes, and is complementaryto secondary market analysis. Primary debtmarket yields are also used for the evaluationof various risk premia.


The Law on the Bank of Lithuania empowersit to collect financial and related statistics.Similarly, the Law on Statistics empowersgovernment ministries, other state and localautonomous institutions, agencies andorganisations, as well as the Bank ofLithuania, to collect data for official statistics.Supervisory institutions, such as the LSC,operate in accordance with the Law onSecurities Market, which empowers the LSC

to collect information during the process ofregistration of securities issues. Theinformation collected serves as a basis forstatistics.

The Law on State Debt requires the MoF toregister state debt liabilities.



The reporting agent for State Treasury billsand marketable government bonds issued byauction in the domestic market is the Bankof Lithuania. Both the MoF and the Bank ofLithuania act as statistics collection agencies.In the case of savings notes, the reportingagents are banks, brokerage companies andthe CSD, while the CSD and the MoF act asstatistics collecting agencies. For governmentdebt securities issued for special purposes,banks and brokerage companies act asreporting agents, with the MoF assuming therole of statistics collection agency. Thereporting and collection agent forgovernment debt securities issued in foreignmarkets, however, is the MoF, whereas it isthe LSC for corporate debt securities andequities. One hundred percent of the totalreporting population is covered and thereare no procedures to limit the reporting burden.

The LSC registers corporate debt securitiesand shares issued by public companies.

In the case of shares, the data include adescription of the shares (i.e. type, class andnumber being issued), the nominal value, thetotal nominal value, the issue price orpreliminary issue price, the share premiumand the currency of denomination.

With regard to debt securities, theinformation comprises the number ofsecurities being issued, the nominal value perunit, the issue price or preliminary issueprice, the nominal value of all the securitiesbeing issued, the issue currency, the interestrate (on the nominal value), the beginning


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and end of the offering, the terms ofconversion or redemption and the paymentof interest.


All securities are dematerialised.

Government debt securities and corporatedebt securities, in the form of eurobonds,are issued in the euromarkets. No othertypes of securities are issued outside thecountry (except for some Global DepositoryReceipt issues of local public companyshares). Eurobonds have been listed on theFrankfurt and Luxembourg stock exchanges.

Corporate debt securities and equity issuesoutside the country are first registered withthe LSC.

The CSD allocates each securities issue aunique International Securities IdentificationNumber (ISIN). The Bank of Lithuania is themajority shareholder in the CSD.

Primary data are collected on the basis ofindividual security information. There are nocommercial data providers for this type ofdata.

In the case of government debt securitiesissues, only central government classificationis applicable, whereas for corporate debtsecurities and equity issues, classification isby economic activity.

Government debt securities issues, end-of-period stock data, gross and net issuance,and gross redemption are broken down byinstrument and original maturity.

Data on government debt securities arecollected electronically, and statistics onissues are published by the Bank of Lithuaniaaccording to their nominal value.


Data on government debt securities in thedomestic market have been collected sincethe beginning of their issuance in July 1994,while data on government debt securities inforeign markets have been collected sinceDecember 1995.

For government debt securities issued byauction, the reporting frequency depends onthe auction days (usually once a week), takingplace at about 12 noon (local time) on theauction day.

The MoF collects the results of savings notesissuance every day. All data are collected inreal time. For the last three years, the dataon savings notes have been posted on theMoF�s website. The data comprises the termof savings notes� issuance, the redemptionday, the total redeemed amount in nominalvalue, the redeemed amount prior to theredemption date, and the average yield.

Security-by-security data is used to compilemonthly data (gross government debtsecurities issues, redeemed government debtsecurities, outstanding government debtsecurities at nominal value broken down bytype of security, and average interest rate ongovernment debt securities), quarterly(outstanding government debt securities atnominal value, gross issuance at nominalvalue, gross repayments at nominal value,average interest rate on government debtsecurities, and weighted average maturity ofoutstanding government debt securities), andannual data.

The LSC collects security-by-securityinformation on corporate debt securities andshares issued.


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Aggregated stock data on government debtsecurities issues refer to the end of thereference period, whereas data on gross andnet issuance and on gross redemptioncorrespond to values during the referenceperiod. To calculate average interest rates,weighted averages are used. Quality controlis ensured by the information systems usedfor processing the data.


To date, there have been no breaks in seriesin government debt securities issues statistics.

3.3.3 Revisions

Government debt securities issues data arenot revised. Published data are always basedon the most up-to-date information. Minorchanges to previously published data arealways incorporated in the next publicationwithout being identified. Revisions of a moresubstantial nature are highlighted in afootnote.

3.4 Publications


The first release of data on government debtsecurities is posted on the Bank of Lithuania�swebsite (www.lb.lt) and on Reuters andBloomberg pages immediately after theauction. Auction results are disseminated toall interested parties simultaneously by theBank of Lithuania.

The statistical data on Treasury bills issuedby auction are posted on the Bank ofLithuania�s website and include the followinginformation: maturity, amount offered, total

demand, accepted total amount ofcompetitive and non-competitive bids,settlement and redemption days, minimumyield and average yield. In the case ofgovernment bonds issued by auction, thecoupon rate, the coupon frequency, thecoupon payment date, the first coupon dateand the penultimate coupon date are alsogiven. These data are published in electronicformat on the day of the auction.

Statistics on marketable government debtsecurities issued by auction are published inthe Bank of Lithuania�s Monthly Bulletin. Thebulletin provides the following informationon Treasury bills issued by auction: maturity(days), amount offered, total demand and saleby nominal value, bid minimum yield, averageyield and accepted highest yield at auction.For government bonds issued by auction, italso provides the coupon rate and thefrequency of coupon payments per year. Thepublication is issued in hard copy within onemonth of the reference month.

The Bank of Lithuania�s Quarterly Bulletinprovides data on government debt securitiesissued by auction (total demand, sale bynominal value, redemptions, government debtsecurities in circulation at the end of theperiod, and average yields of differentmaturities of government debt securities).When reporting started, data werepresented in annual time series; however,the data for the last three years have beenbroken down into quarterly time series. Thepublication is issued within a period of twomonths after the reference period.

Information on all types of government debtsecurities is available on the MoF�s website(www.finmin.lt). Data on the average yield ofgovernment debt securities (except forsavings notes) broken down by instrumentare available in annual time series from 1994to 2000. Since 2001, these data have beenavailable in monthly, quarterly and annualtime series. Data on the average yield ofsavings notes broken down by maturity havebeen available in monthly, quarterly andannual time series since 1999.


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Monthly data on government debt securitiesissues broken down by instrument andmaturity are posted on the MoF�s website(www.finmin.lt) within 20 days of the end ofreference month.

Annual data on outstanding government debtsecurities broken down by instrument andmaturity, and indicating gross issuance andgross redemption, are available in time serieson the MoF�s website by the March of theyear following the reference period.

Annual aggregated data on the issuance ofcorporate debt securities at their nominalvalue (since 1995) are available in electronicformat (www.lsc.lt) and in hard copy fromthe LSC. A hard copy of the annual report ofthe LSC is issued in June.


The Bank of Lithuania publishes a BankingStatistics Yearbook (available in hard copy inJune) which is based on the Bank�s auctiondata (government debt securities issues,demand and sales by auction at nominal value,redemption, government debt securities incirculation). The data are given in annual timeseries.

3.5 Users

The main users of securities issues statisticsare the Bank of Lithuania, the MoF,international rating agencies, StatisticsLithuania, the LSC, the CSD, financialinstitutions, investors and academicinstitutions.


4.1.1 Definitions

Financial derivatives statistics cover the maintypes of instruments - forward, future, swapand option transactions (put/call) - inaccordance with the risk category involved(foreign currency, interest rate, preciousmetals, equity-related and other contracts).Foreign exchange derivatives are brokendown by currency, counterparty (banks, non-banks, residents and non-residents) andmaturity of contract. The definitions offinancial derivatives in general conform toaccepted international definitions(International Monetary Fund, IAS).


Financial derivatives statistics are used tomonitor market activity and to evaluatebanks� management policies that are relatedto the risks of using financial derivatives.


In accordance with the Law on Statistics, theBank of Lithuania is required to manageofficial statistics in its field of responsibility.The Law on the Bank of Lithuania empowersit to collect data on financial and relatedstatistics.



The reporting population concerned withfinancial derivative statistics covers allcommercial banks and foreign bank branches.

Reporting agents are requested to providedata on the financial derivatives traded bothover-the-counter (OTC) and on the stockexchange.

Financial derivatives reported by commercialbanks are mostly OTC foreign exchangeforward, swap and option transactions.



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The monthly reports on financial derivativesinclude:

� outstanding amounts of contracts at theend of a reporting period broken downby instrument and risk category;

� volumes of transactions completed duringa reference period broken down byinstrument and risk category; and

� outstanding amounts of OTC contractsat the end of a reference period brokendown by maturity, instruments and riskcategory.

Monthly data on financial derivatives are usedsolely for the needs of internal prudentialsupervision.

Weekly data contains the volumes ofcontracts of foreign exchange derivativesconcluded during a reference period, brokendown by currency, counterparty andmaturity.

The monthly and weekly data on financialderivatives are submitted electronically.

The Bank of Lithuania determines themethodological guidelines for reporting.Reporting agents provide data on financialderivatives in accordance with the IAS andthe accounting policy approved by the Bankof Lithuania. The data on financial derivativesare included in other reports as well as �onbalance sheet� and �off balance sheet�.


Monthly time series of data on financialderivatives start in October 1998, while timeseries for weekly data on foreign exchangederivatives start in January 1999.

The weekly data has to be submitted to theBank of Lithuania by 1 p.m. (local time) every

Tuesday, and the monthly data within aperiod of ten days after the end of thereference month.


4.3.1 Definitions

The monthly data on financial derivatives areend-of-period data, with the exception ofdata on transactions completed during theperiod.

The weekly data on foreign exchangederivatives are data on turnover during thereference period.


There have been no significant changes inreporting instructions or methodology.

4.3.3 Revisions

Published statistics are final. In the event ofsubstantial changes, revised data arehighlighted in explanatory footnotes.

4.4 Publications


Foreign exchange derivatives statistics arefirst published on the Bank of Lithuania�swebsite (www.lb.lt). Data are disseminatedboth weekly and monthly.

Foreign exchange derivatives statistics arealso published in the Bank of Lithuania�sMonthly and Quarterly Bulletins (available inhard copy). Monthly Bulletins are publishedwithin a period of one month after the endof the reference period, while publication ofQuarterly Bulletins is within a period of twomonths.


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Not available.

4.5 Users

The Bank of Lithuania, banks, StatisticsLithuania, government ministries, internationalorganisations and the general public.


5.1.1 Definitions

Bank interest rate statistics cover interestrates applied by commercial banks andforeign bank branches to deposits by andloans to resident and non-resident customers(non-financial public and private enterprises,private households, non-profit organisations,central and local government and socialsecurity funds), irrespective of their size.

Data on interest rates on new loans arebroken down by counterparty (non-residents, residents, enterprises andhouseholds), maturity (up to one month, overone and up to three months, over three andup to six months, over six and up to 12months, over one and up to five years, andover five years) and currency (EUR, LTL,USD, and combinations of other foreigncurrencies).

Interest rate data are compiled for time,demand and savings deposits. Interest rateson new time deposits are broken down bycounterparty (non-residents, residents andhouseholds), maturity (up to one month, overone and up to three months, over three andup to six months, over six and up to 12months, over one and up to two years, andover two years) and currency (EUR, LTL,USD, and combinations of other foreigncurrencies). Interest rate data for demanddeposits and savings deposits based onamounts outstanding are broken down bycounterparty (non-residents, residents andhouseholds) and currency (EUR, LTL, USD,and combinations of other foreigncurrencies).

The classification of economic units byresidents/non-residents is provided in theECB publication entitled �Money and bankingstatistics in the accession countries:Methodological manual� (Sub-section 2.2.1 ofthe country chapter on �Lithuania�).

Definitions of sectors in bank interest ratesstatistics are defined in Table 2 of the countrychapter on �Lithuania� in the ECB publicationentitled �Money and banking statistics in theaccession countries: Methodological manual�,except for the �private households� sector,where sole proprietorships are also included.


Interest rate data are used to analysemonetary developments, borrowing costs inthe non-financial sector and competition inthe banking sector, to determine thesensitivity of household saving and corporateborrowing to interest rate changes, toimplement macro-prudential supervision ofbanks and to monitor the stability of financialsystem.


In accordance with the Law on Statistics, theBank of Lithuania is required to compileofficial statistics in the field in which itdischarges its responsibility. The Law on theBank of Lithuania empowers the it to collectdata on financial and related statistics.



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The reporting population concerned withretail interest rate statistics covers allcommercial banks and foreign bank branches,but not credit unions.4

The interest rates (business volume) ofreporting banks cover 100 % of the totaldeposits received and 100% of the total loansgranted.

Commercial banks aggregate interest ratedata of their branches and report these tothe Bank of Lithuania.


There is one reporting system for allreporting agents, and a census approach isapplied.

Reporting agents provide the data on thenominal rates of all instrument categories ofloans and deposits referring to new businessand amounts outstanding. The nominal rateis an annual interest rate agreed betweenthe bank and the customer for a deposit orloan, excluding any charges.

The weekly and monthly data on deposit andloan interest rates are submitted to the Bankof Lithuania electronically.

The Bank of Lithuania providesmethodological guidelines on completingreport forms.


The time series for monthly bank interestrate data starts in December 1992; timeseries for weekly data starts in January 1997.

The weekly data on interest rates on loansand deposits have to be submitted to the

Bank of Lithuania by 1 p.m. (local time) everyTuesday, and the monthly data within aperiod of ten days after the end of thereference month.



Bank interest rate statistics comprise interestrates on new business (for time deposits andloans) and on outstanding amounts (fordemand and savings deposits). Rates on newbusiness are calculated as averages for theperiod, while rates on outstanding amountsare calculated as end-of-period averages.

Reporting agents aggregate information onindividual loans and deposits and calculateweighted average interest rates. Interestrates on new business are calculated as theweighted average of all interest rates on newcontracts concluded during the reportingperiod. Interest rates on outstanding amountsare calculated as the weighted average of allrates applied to the stock of deposits on thelast day of the reference period.

The Bank of Lithuania collects interest ratedata as well as information on the amountsof new contracts and on the amountsoutstanding. It compiles weighted averageinterest rates for each of the instrumentcategories on new business (time depositsand loans) and on outstanding amounts(demand and savings deposits).


There have been no significant changes inreporting instructions or methodology, andno adjustments were made for any type ofinterest rate.

4 See Table 5 in the country chapter on “Lithuania” in “Moneyand banking statistics in the accession countries: Methodologicalmanual”.


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5.3.3 Revisions

Published interest rate statistics are usuallyfinal. In the event of substantial changes,revised data are highlighted in explanatoryfootnotes.

5.4 Publications


Interest rates on loans and deposits are firstpublished on the Bank of Lithuania�s website(www.lbank.lt). Data are disseminated in theform of time series. The new monthly dataare available within two weeks after the endof the reference month.

Interest rates on loans and deposits are alsopublished in the Bank of Lithuania�s Monthlyand Quarterly Bulletins (available in hardcopy). Monthly Bulletins are published within

a period of one month after the end of thereference period, while publication of QuarterlyBulletins is within a period of two months.


Interest rates statistics are published in theBanking Statistics Yearbook (a hard copy ispublished in June). The source is the Bank ofLithuania�s data: average resident deposit andlending rates broken down by instrumentcategory and currency (national and foreign).The data are presented in the form of annualtime series.

5.5 Users

The Bank of Lithuania, Statistics Lithuania,MFIs, OFIs, government ministries,international organisations and the generalpublic.


Mrs. Jurgita MaslauskaiteMonetary Policy DepartmentE-mail: [email protected]: +370-5-268-04-22Fax: +370-5-268-04-28

6 Contacts at the Bank of Lithuania

Ms Birute GrikinyteMonetary Policy DepartmentE-mail: [email protected]: +370-5-268-04-06Fax: +370-5-268-04-28

Mrs. Ausra BuivieneMonetary Policy DepartmentE-mail: [email protected]: +370-5-268-04-20Fax: +370-5-268-04-28


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Malta





MFSA Malta Financial Services Authority

MGS Malta government stocks

MSE Malta Stock Exchange

NSO National Statistics Office




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1.1.1 Introduction

The financial sector in Malta is currentlyorganised into three broad groups:

� credit institutions licensed under theBanking Act, the supervision of which isperformed by the Malta Financial ServicesAuthority (MFSA) that acts as solefinancial regulator;

� other financial intermediaries, which maybe split into two broad categories:

� all institutions which are licensed underthe Financial Institutions Act, excludingforeign exchange bureaux and financialleasing companies, the latter having beenexempted from the obligation to obtaina licence to carry out financial leasingactivities under the Act (examples of suchinstitutions are corporations engaged infactoring and institutions offeringpersonal and commercial finance), and

� certain collective investment schemes ormutual funds which are licensed underthe Investment Services Act, a categorythat includes a small number of moneymarket funds which are eligible forinclusion as monetary financialinstitutions (MFIs) on the basis of thefact that their underlying investments arein money market instruments; and

� insurance companies (in this regard, itshould be mentioned that no institutionshave to date been licensed to offerpension funds).

The financial auxiliaries sector includes mostof those financial institutions that do not fallinto one of the three main sectors mentionedabove. In this respect, foreign exchangebureaux, which are licensed under theFinancial Institutions Act, are among the mostnumerous in this sector.

The MFSA collects monthly data from allother financial intermediaries (OFIs). Anofficial agreement is in place between theMFSA and the Central Bank of Malta wherebydata are either received simultaneously bythe two institutions, or received initially bythe MFSA and subsequently forwarded tothe Central Bank of Malta.

1.1.2 Definitions

The term �financial institution� is legallydefined in the Financial Institutions Act of1994 as �any person whose regularoccupation or business is the carrying out of

(a) Any activity listed in the Schedule to thisAct;

(b) Any other activity defined by the Ministeras such by an order published in theGazette amending the Schedule to thisAct, for the account and at the risk ofthat person carrying out such business:

Provided that these activities are not fundedthrough the taking of deposits or otherrepayable funds from the public as defined inthe Banking Act.

Provided further that this Act shall not applyto any activity under (a) or (b) above, whichis regulated under the Investment ServicesAct;�

The Schedule of the Act shows the permittedactivities of financial institutions, whichinclude:

� lending (including personal credits,mortgage credits, factoring with orwithout recourse, financing ofcommercial transactions, includingforfeiting);

� financial leasing;

� venture or risk capital;



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� money transmission services;

� issuing and administering means ofpayment (e.g. credit cards, traveller�scheques and bankers� drafts);

� guarantees and commitments;

� trading for one�s own account or for theaccount of customers in:

� money market instruments(cheques, bills, certificates ofdeposit, etc.);

� foreign exchange;

� financial futures and options;

� exchange and interest rateinstruments;

� transferable instruments;

� underwriting share issues and theparticipation in such issues; and

� money broking.

The term �collective investment scheme� isdefined in the Investment Services Act as:

�any scheme or arrangement which has as itsobject or as one of its objects the collectiveinvestment of capital acquired by means ofan offer of units for subscription, sale orexchange and which has any of the followingcharacteristics:

(a) the scheme or arrangement operatesaccording to the principle of riskspreading; or

(b) the contributions of the participants andthe profits or income out of whichpayments are to be made to them arepooled; or

(c) at the request of the holders, units areor are to be re-purchased or redeemedout of the assets of the scheme or

arrangement, continuously or in blocksat short intervals; or

(d) units are, or have been, or will be issuedcontinuously or in blocks at shortintervals ...�


The Central Bank of Malta monitors a widerange of statistical data and information onOFIs in connection with its responsibilitiesfor monetary policy and financial stability.


Arrangements are in place to ensure thatthe Central Bank of Malta receives suchinformation from the MFSA on a monthlybasis. Section 14 of the Financial InstitutionsAct empowers the competent authority tocollect statistical data from OFIs. Section 14states that �a financial institution shall submitsuch information and statements relating toits branches in or outside Malta as thecompetent authority may require in thedischarge of its duties under this Act or anyother law�.

The Investment Services Act also empowersthe competent authority to ask for statisticalinformation from holders of licences forinvestment services. In fact, Section 13 ofthe Act states that �the competent authoritymay, by notice in writing require any personwho is or was providing, or who appears tobe or to have been providing, an investmentservice; or a collective investment scheme;or any person who is or was carrying on, orwho appears to be or have been carrying onactivities in connection with such a schemeto furnish to the competent authority, atsuch time and place and in such form as itmay specify, such information anddocumentation as it may require with respectto any such service, scheme or advertisementas aforesaid; or to furnish to the competentauthority any information or documentation


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aforesaid verified in such manner as it mayspecify�.



� All institutions that are licensed underthe Financial Institutions Act are obligedto submit information to the authorities.As the basis of their reporting, theinstitutions use the same monthly returnsas those submitted by the creditinstitutions, but they only report theinformation specifically applicable tothem. At the end of December 2002,eleven exchange bureaux, one lendinginstitution and a factoring company weresubmitting returns. Complete coverageof data is in place.

� All collective investment schemes,including three money market funds,report monthly information to the MFSA.The latter then forwards the data to theCentral Bank of Malta. At the end of2002, there were 16 locally licensedcollective investment funds submittingreturns.


� OFIs licensed under the FinancialInstitutions Act prepare a monthly set ofreturns. These returns include stock dataas at the end of the reference month.The main schedule is the balance sheetof the institution. The other schedulescomprise a further breakdown of mostof the major items on the balance sheet,particularly those related to assets. Loansand securities are two of the items whichare broken down by maturity, by sector,by issuing country and also by currency.With regard to the maturity breakdown,reference is frequently made to�remaining term to maturity�. Thesectoral classification of loans and

securities does not yet conform to theEuropean System of Accounts 1995 (ESA95). Moreover, additional quarterlyreturns, including data on theperformance of the institutions, aresubmitted to the authorities in electronicformat (diskette).

� OFIs licensed under the InvestmentServices Act also report monthly balancesheet data. These returns are broadly inline with the classification of the ESA 95.The original maturity concept is used forthe categorisation of loans and depositsin these schedules. The MFSA receivesthe schedules from the collectiveinvestment schemes on diskette or inanother electronic format andsubsequently forwards the informationto the Central Bank of Malta in electronicformat.


� Institutions licensed under the FinancialInstitution Act have been reportingstatistical information since January 1995.Data are received monthly by the 15thcalendar day of the month following thereference period.

� Collective investment schemes startedreporting statistical information inDecember 1998, initially on a quarterlybasis and then, as from January 2001, ona monthly basis. Data are received bythe end of the month following thereference period.



There are no specific procedures in placefor dealing with breaks in a data series.


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1.3.2 Revisions

There are no specific revision procedures.

1.4 Publications

Neither the Central Bank of Malta nor theMFSA currently publish data on OFIs.

1.5 Users

The main users of data on OFIs are theCentral Bank of Malta, the MFSA and theNational Statistics Office (NSO).


2.1.1 Definitions

The financial market can be split into twomain parts: the money market and the capitalmarket.

The money market is made up of (a) themarket for repurchase agreements (repos),which is mainly used by the Central Bank ofMalta for open market operations inconnection with the its monetary policy; (b)the market for Treasury bills; and (c) theinterbank market. The Central Bank of Maltacarries out weekly auctions in the repomarket, in which the domestic banks are themain participants. The secondary market forTreasury bills is fairly active, with the CentralBank of Malta and banks as the dominantplayers. Activity in the interbank market islimited and mainly influenced by the bankingsystem.


Financial markets statistics are continuouslyused by the Central Bank of Malta foranalytical purposes related to its monetarypolicy responsibilities. A number of statisticalreports on developments in the varioussegments of the financial market arepresented to the Bank�s Monetary PolicyCouncil for discussion at its monthlymeetings. Financial market statistics are also

used by the MFSA, the Ministry for EconomicServices and the Malta Stock Exchange (MSE).


The MFSA and the Central Bank of Maltareceive data on financial markets in themonthly banking returns. However, otherrelated data are also available to the CentralBank of Malta from other sources, includingthe Ministry of Finance and the MSE. TheMinistry of Finance compiles data on thesecondary market for Treasury bills throughits involvement in dealings. The MSE compilesdata on short-term securities that are listedand traded on the stock exchange.



Data on financial markets are receiveddirectly from banks in the monthly bankingreturns, but data from other sources alsohave to be obtained as the coverage issomewhat limited. These sources include:

� for the repo market - the Central Bankof Malta;

� for the secondary market for Treasurybills - the Central Bank of Malta and theMinistry of Finance and



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� for the interbank market - banks directly,but only verbally.


The types of data received by the CentralBank of Malta vary in detail from one sectorof the market to another. Data collectedinclude:

� repo market - volume, values,counterparties, rates and maturityperiods;

� secondary market for Treasury bills -volume, values, counterparties and prices;

� interbank market - volume, counterparties,rates and maturity periods; and

� foreign exchange market - counterparties,rates, values and denominations;

Most of the data are received in hard copy,although some of the data are receivedelectronically.


Most of the data received by the CentralBank of Malta is received from the otherauthorities which are either directly involvedin trading or supervise the transactions. Dataare generally available weekly.

Data on the financial markets first becameavailable in 1992, when the MSE commencedoperations. In subsequent years, with theestablishment of other financial markets,more data has become available.



The types of data provided by other partiesare as follows:

� repo market - flow data;

� secondary market for Treasury bills -flow data;

� interbank market - flow data; and

� foreign exchange market - transactionsas they occur.

With regard to interest rates, the rateprevailing at the end of the month is normallyquoted for all markets, unless specificallyrequested otherwise in ad hoc exercises.


There are no specific procedures in placefor breaks in data series.

2.3.3 Revisions


2.4 Publications


� repo market - weekly report issued bythe Central Bank of Malta;

� secondary market for Treasury bills -weekly report issued by the Central Bankof Malta and rates quoted daily;

� interbank market - weekly report issuedby the Central Bank of Malta; and

� foreign exchange market - data are notreleased.


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Selected financial market data feature in theCentral Bank of Malta�s monthly releasewhich is posted on its website and publishedin its Quarterly Review and Annual Report.

2.5 Users

Users of financial market data are the CentralBank of Malta, the Ministry of Finance, theMFSA and the MSE.


3.1.1 Definitions

The legal definition of securities, accordingto Article 2 in the schedule called �TheStatute� appended to the Malta StockExchange Act, is as follows:

(i) shares, stocks, bonds, debentures,certificates of deposits, notes and otherlike instruments denoting ownership orcreating or acknowledging indebtedness;

(ii) units in a collective investment scheme asdefined in the Investment Services Act of1994;

(iii) warrants, options, certificates or otherinstruments, including any record whetheror not in the form of a document,entitling the holder to subscribe for,acquire, sell or otherwise dispose of,underwrite or convert any instrumentor an interest in any instrument fallingwithin this definition or for any currency;

(iv) certificates or other instruments whichconfer property rights in respect of anyinstrument falling within this definition;

(v) futures and foreign exchange contractsentered into for investment purposes orforeign exchange acquired or held forinvestment purposes; and

(vi) rights under a contract for differencesor under any other contract the purposeor intended purpose of which is tosecure a profit or avoid a loss ofreference to fluctuations in the value or

price of property of any description orin an index or other factor designatedfor that purpose in the contract.

At present, the following types of securitiesare traded on the MSE:

� ordinary shares;

� preference shares;

� government stocks/bonds; and

� corporate bonds.

Securities are generally issued by theGovernment, financial institutions and, to alesser extent, by private non-financialcompanies. The Government issues Treasurybills and bonds, the latter being referred toas Malta Government Stocks (MGS). Theprimary market for Treasury bills is one ofthe main sources of short-term governmentborrowing. The Central Bank of Malta doesnot participate in this market, which isdominated by banks and other financialinstitutions. Treasury bill auctions arenormally held on a weekly basis. MGS arelaunched on the primary market at irregularintervals. The Ministry of Finance isresponsible for maintaining all data on theallotment of the issues. Corporate entitiesalso issue securities and these may or maynot seek a listing on the capital market (theMSE).


The Central Bank of Malta uses data andinformation on securities issues in its analysis



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of financial markets and monetary conditions.This analytical work is related to itsresponsibility for monetary policy andfinancial stability.


Securities issues statistics are collected orcompiled by four separate authorities. Theseare the MSE, the NSO, the Central Bank ofMalta and the MFSA.

The Malta Stock Exchange Act of 1990 givesauthority to the MSE to request data fromcompanies that issue securities which aresubsequently listed on the Exchange.

The NSO is authorised to requestinformation from those companies whichissue unlisted securities of any type. Underthe Malta Statistics Authority Act of 2000,the NSO has the authority to ask forsecurities issues statistics. With regard tothe Central Bank of Malta and the MFSA,both have the power to request data onsecurities issues from MFIs and otherfinancial institutions. This power is given tothem by the Banking Act of 1994 and theCentral Bank of Malta Act.

Apart from the explicit powers of thedifferent authorities provided by legislation,informal arrangements are in place for theprovision of information on securities issued.A typical example is the case of the CentralBank of Malta, which receives substantialinformation from the Ministry of Finance onsecurities issued by the government boththrough weekly Treasury bill auctions andoccasional issues of MGS.



The MSE compiles and distributes data onthose securities issues that are listed on thestock exchange. Data are gathered at the

time that a corporation or similar entityapplies for its securities to be listed. No dataon issues of unlisted securities are collected.


The MSE is also responsible for reportingnew issues of listed securities. The data arecollected and maintained in accordance withthe By-laws of the Exchange (Nos. 5.92 and5.93) which state:

�The Exchange shall establish a CentralSecurities Depository which shall maintainthe Register for each security admitted for alisting on the Exchange. This Register shallcontain the registration details of a holder ofsuch security including any or all of thefollowing:

� full name and address;

� identity card number;

� passport number;

� company registration number

� residence or place of incorporation;

� account number generated by theExchange;

� any other relevant details as the CentralSecurities Depository may reasonablyrequire for administrative purposes� (By-law No. 5.92).

�The Central Securities Depository shall beregulated in terms of the By-laws of theExchange� (By-law No. 5.93).

The MSE has set up an electronic CentralSecurities Depository which maintains theregisters for each security admitted for listingon the stock exchange, using speciallydesigned, sophisticated software. Eachinvestor is assigned an account numbergenerated by the MSE under which all theinvestor�s holdings are recorded. Movements


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arising from purchases and sales of securitiesare reflected in the investor�s account; theinvestor is informed of all such movementsthrough the issue of a �Registration Advice�.


Data are disseminated by the MSE whenevera new security is listed.



The data disseminated refers to end-of-period values.


There are no specific procedures in placefor dealing with breaks in data series.However, it is relevant to mention that thestatistics issued by the MSE have not beensubject to any significant revisions to date.

3.3.3 Revisions


3.4 Publications


Information on new securities issues, whichare listed on the MSE, is released on the firstday of trading. In fact, such informationfeatures in the daily official list which ispublished on the MSE�s website and in hardcopy. No other authority releases data onsecurities issues.


� Monthly report, which is used internallyand also disseminated to the Ministry ofFinance.

� Quarterly report, which is published inhard copy and available to the generalpublic. It provides statistical informationon the activity that took place in themarket during the quarter, including theissue of any new securities.

3.5 Users

The main user of the data available onsecurities issues is the MSE. Other users arethe Central Bank of Malta, both for monetarypolicy and financial stability purposes, theMFSA, credit institutions, fund managementfirms, and stockbrokers.


4.1.1 Definitions

The financial derivatives market is still verylimited in size. However, the meaning offinancial derivatives, as understood in Malta,does not differ from the definition used bythe International Monetary Fund (IMF),namely that �a financial derivative contract isa financial instrument that is linked toanother financial instrument and through

which specific financial risks can be traded intheir own right in financial markets�.

Options, futures (no official market) andstructured notes are used only to a verylimited extent. Forward contracts in foreigncurrencies are actively traded by banks, bothwith domestic and with foreigncounterparties. Foreign currency swaps areused mostly in deals between the CentralBank of Malta and local banks.



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With regard to the treatment of derivativefinancial instruments, including forwardforeign exchange contracts and currencyswaps, these are initially shown in the balancesheet at cost (including transaction costs),and subsequently at their fair value. Fairvalues for derivative contracts aredetermined on the basis of forward exchangemarket rates on the balance sheet date.Discounting techniques are used to reflectthe fact that the exchange will not occuruntil a future date, when the value of moneyat the time has a significant effect on the fairvaluation of these instruments. All derivativesare carried as assets when their fair value ispositive and as liabilities when their fair valueis negative.

The Central Bank of Malta uses derivativesfor macro-hedging purposes to cover againstforeign exchange risk on its net balance sheetposition. Accordingly, while providingeffective economic hedges under the Bank�srisk management policies, the Central Bankof Malta�s derivative transactions do notqualify for hedge accounting under thespecific rules of International AccountingStandard (IAS) 39 and are classified asinstruments held for trading. Changes in thefair value of all derivative instruments whichdo not qualify for hedge accounting underIAS 39 are specifically referred to in theprofit and loss account.


Owing to the modest amount of transactionsinvolving financial derivatives and to the factthat there is no organised local market forfinancial derivatives, the influence of suchinstruments on financial markets is limited.As a result, the Central Bank of Malta doesnot use data on financial derivatives for itsanalysis of monetary and financialdevelopments.


To date, there is no legislation that givespowers to any authority to collect dataspecifically on financial derivatives. However,such data can still be compiled throughlegislative provisions which permit theCentral Bank of Malta, as well as otherauthorities, to collect such statistics fromany party. In 2001, most local bankscommenced the alignment of their accountingsystems with the IAS, which requires thetreatment of financial derivatives as on-balance-sheet items.


4.2.1 Selection of data providers

Financial derivatives are traded solely �over-the-counter�, as there is no organisedexchange for such instruments. Moreover,there are no specific reporting arrangementsin place.

4.2.2 Collection schemes

No reporting system exists at present.

4.2.3 Time Range, frequency andtimeliness of reporting

No such requirements exist as there is noreporting system in place.


4.3.1 Definitions

Separate data are not stored in a database atpresent.


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Data are not stored in a database at present.

4.3.3 Revisions

Data are not stored in a database at present.

4.4 Publications


Data on financial derivatives are notpublished.


Data on financial derivatives are notpublished.

4.5 Users

The Central Bank of Malta and the MFSA arethe main users of data on financial derivatives.The current bank returns do not provideseparate data on financial derivatives.


5.1.1 Definitions

On September 10, 2002 the Parliamentapproved the amendments to the CentralBank of Malta Act, whereby, inter alia, thecomplete liberalisation of interest rates wasbrought into force.


MFI interest rates are closely monitored eachmonth to assess emerging trends in moneymarket conditions in the light of the CentralBank of Malta�s monetary policy stance.


The amendments to the Central Bank ofMalta Act state that "the Bank may require areporting agent... to provide the Bank withsuch information as the Bank may considernecessary to carry out its functions underthis Act...".

Currently, selected information on interestrates is submitted by credit institutionsthrough Banking Directive No. 6 (commonlyreferred to as BD06) which was issued underthe Banking Act. Such information is providedby the credit institutions to the MFSA, whichis the institution responsible for thesupervision of all financial services in Maltaand which assumed responsibility forsupervising the credit institutions on 1January 2002.



With regard to reporting coverage, interestrates statistics, i.e. census data, are collectedfrom all credit institutions. The informationreceived relates to interest rates on creditinstitutions� Maltese lira-denominated loansand deposits.


The reporting arrangement covers all banksin Malta and is undertaken on the basis ofcensus data, as opposed to sampling methods.



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Interest rates on loans by credit institutionsare classified by industry/economic activity,while deposit interest rates are classified bytype of deposit, namely current, savings ortime deposits. Interest rates on time depositsare further classified by maturity. Weightedaverage interest rates are reported in thecase of both loans and deposits. Statisticalinformation is received by the Central Bankof Malta in electronic format (diskette) andin hard copy. All interest rate data refer toend-of-month positions.


Reporting of data on interest rates on loanscommenced in the early seventies. The seriescontinued in the same format until the mid-1990s. A new series featuring more detaileddata was introduced in January 1996. Sincethen, there have been no major breaks inthe data. In the case of interest rates ondeposits, the current series dates back toJanuary 1995. Interest rates on both loansand deposits are collected on a monthly basisand are received at the Central Bank of Maltaby the 15th calendar day following the end ofthe reference month.



Data collected refer to weighted averages ofend-of-period rates. The averages areweighted by volume, i.e. the size of the actualbalances within the specified category.


There have been no major breaks in series inthe data on interest rates on loans collectedafter January 1996.

5.3.3 Revisions

There are no officially listed or specific rules forrevisions. However, the understanding betweenthe authorities and the reporting banks isthat banks should communicate any revisionto the Central Bank of Malta as soon as it isavailable. Subsequently, the Central Bank ofMalta should revise its database and issuethe revised data in its official publication (theQuarterly Review). However, if the revisionresults in significant changes in the data, theCentral Bank of Malta may decide to publisha footnote with an explanation of thechanges. This note would appear at thebottom of the amended table.

5.4 Publications


Aggregate interest rate data on loans anddeposits are first released in a set of monthlytables that appear on the Central Bank ofMalta�s website. These data are publishedwithin a month of the reference month.


The aggregate interest rate data wouldsubsequently appear in the Central Bank ofMalta�s quarterly publication, the QuarterlyReview. This publication includes statisticaltables containing economic and financialstatistical information. Interest rate data areshown in three of the tables. The source ofthe data is the banks� monthly returns. TheQuarterly Review is generally issued withinthree months of the reference quarter and isalso available on the Central Bank of Malta�swebsite.

5.5 Users

Apart from internal users at the Central Bankof Malta and at the MFSA, selected data aresubmitted to international institutions such


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as the IMF, Eurostat and the EuropeanCentral Bank.


Mr. Roderick Psaila - Assistant ExecutiveStatistics OfficeTelephone: 00356 2550 4414Fax: 00356 2550 2500E-mail: [email protected]

6 Contacts at the National Bank of Malta

Mr. Jesmond Pule' - ManagerStatistics OfficeTelephone: 00356 2550 4401Fax: 00356 2550 2500E-mail: [email protected]

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b.o.p. balance of payments



EUR euro

GINB General Inspectorate of Banking Supervision - Generalny Inspektorat NadzoruBankowego

GPW Warsaw Stock Exchange - Gielda Papierów Wartościowych w Warszawie S.A.

GUS Central Statistical Office - Glówny Urząd Statystyczny

ISIN International Security Identification Number

KDPW National Depository for Securities - Krajowy Depozyt Papierów WartościowychS.A.

KPWiG Polish Securities and Exchange Commission - Komisja Papierów Wartościowychi Giełd


NIF national investment fund



PLN Polish zloty


SKOK co-operative savings and credit union - spóldzielcza kasa oszczędnosciowo-kredytowa

UCITS undertakings for collective investment in transferable securities

USD US dollar

WIBID Warsaw interbank bid rate

WIBOR Warsaw interbank offered rate


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1.1 Types of financial institutions

1.1.1 Introduction

One of the stages in the adjustment of moneyand banking statistics to the requirements ofthe European Central Bank (ECB) was theintroduction of sectorisation in line with theEuropean System of Accounts 1995 (ESA 95).Sectoral classification effective as from March2002 has been agreed with the CentralStatistical Office (GUS) and the Ministry ofFinance and will be followed in officialstatistics compiled by the institutions.

The sub-sector formed by other financialintermediaries (OFIs) (S123 of the ESA 95)consists of non-monetary financialcorporations and quasi-corporations (exceptfor insurance corporations and pensionfunds) which are principally engaged infinancial intermediation by incurring liabilitiesin forms other than currency, deposits and/or close substitutes of deposits frominstitutional units other than monetaryfinancial institutions (MFIs).

The following entities are classified in thissub-sector: co-operative savings and creditunions (SKOKs), investment funds, nationalinvestment funds (NIFs), corporationsengaged in financial leasing, corporationsengaged in factoring, brokerage houses andfinancial vehicle corporations created to actas holders of securitised assets. Separate dataare disseminated only for SKOKs, investmentfunds and brokerage houses.

1.1.2 Definitions

Co-operative savings and credit unions

The Law of 14 December 1995 on co-operative savings and credit unions1 laysdown the legal framework for SKOKs. Onlyindividuals bound by professional ororganisational relations can be members ofSKOKs - in particular, individuals or

employees of one or a small number ofenterprises belonging to the same social orprofessional organisation. The aim of SKOKsis to collect funds and grant loans and creditssolely to their members, to perform financialsettlements at the request of members, andto serve as an intermediary for theconclusion of insurance agreements asdefined in the Act of 28 July 1990 oninsurance activity2.

SKOKs are non-profit institutions. They aresupervised by the National Association ofCo-operative Savings and Credit Unions.

Investment funds

The Act of 28 August 1997 on investmentfunds3 regulates the activities of investmentfunds and societies of investment funds.

Investment funds are legal persons whoseexclusive activity is to invest capital funds,raised either publicly or non-publicly, insecurities and other property rights.

Societies of investment funds, which areclassified as financial auxiliaries, create,manage and represent investment funds inrelations with third parties. Upon the entryof an investment fund into the investmentfunds register, a society of investment fundsbecomes the fund�s representative body.

The Polish Securities and ExchangeCommission (KPWiG) supervises allinvestment funds and societies of investmentfunds.

Investment funds may operate as: (i) open-end investment funds; (ii) specialised open-end investment funds; (iii) mixed investmentfunds; (iv) closed-end investment funds; or(v) specialised closed-end investment funds.


1 Journal of Laws of 1996, No. 1, item 2, as amended.2 Journal of Laws of 1990, No. 11, item 62, as amended3 Journal of Laws of 2002, No. 49, item 448, as amended.


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Only open-end investment funds comply withCouncil Directive 85/611/EEC on the co-ordination of laws, regulations andadministrative provisions relating toundertakings for collective investment intransferable securities (UCITS), with regardto investments of UCITS.

Open-end investment funds and specialisedopen-end investment funds sell participationunits, which are not securities. Other typesof investment fund issue investmentcertificates, which are regarded as securitiesas defined in law. Natural persons, legalpersons and unincorporated organisationalentities may be participants in open-endinvestment funds. Participation units ofspecialised open-end investment funds aregenerally available to all potential investors.The statute of a specialised open-endinvestment fund may, however, limit thenumber and type of investors who areallowed to become participants in the fund.

Participants in mixed investment funds,closed-end investment funds or specialisedclosed-end investment funds that issueinvestment certificates admitted to publictrading may be persons who purchaseinvestment certificates in the market orpersons specified in the issuing prospectus.Moreover, offers of specialised investmentfunds, which issue investment certificates notadmitted to public trading, are usuallydirected at specific investors.

The principles of a fund�s investment policyare set out in its statute. These include: (i)the portfolio diversification; (ii) theinvestment selection criteria; (iii) the typesof securities the portfolio shall contain; and(iv) the rules concerning the taking up ofloans and credits.

Open-end investment funds are quiterestricted in the investments they are allowedto make, while a wider range of investmentsis allowed for specialised close-endinvestment funds. A venture capitalenterprise may take the form of a specialisedclosed-end investment fund.

Brokerage houses

The Law of 21 August 1997 on the publictrading of securities4 provides for thepossibility of conducting brokerage activitiesin the Republic of Poland for the followingentities: non-bank joint stock companies(brokerage houses), banks (brokerageoffices) and foreign legal persons (at present,this form does not exist).

Banks may only conduct brokerage activitiescompletely separately (in an organisationaland financial sense) from the rest of thebank. For statistical purposes, all operationsof bank brokerage offices are classified asoperations of banks.

A brokerage house is a licensed joint stockcompany whose headquarters are locatedwithin the Republic of Poland.

According to the Law on the public tradingof securities, brokerage activities conductedon the regulated market include activitiesassociated with public trading in securitiesapproved for public trading. Some activitiesrequire permission from the KPWiG (e.g.offering securities for primary distributionor in initial public offerings, buying and sellingsecurities for another person�s account, andbuying and selling securities for own accountin order to perform tasks associated withorganising a regulated market) and some donot (e.g. drawing up a statutory prospectusand information memorandum, buying andselling securities for own account in orderto execute underwriting agreements orstandby underwriting agreements, managingown securities portfolio).

All entities conducting brokerage activitiesare licensed and supervised by the KPWiG.

Specific provisions related to the brokeragehouses sector include the following EUdirectives: Council Directive 93/22/EEC of10 May 1993 on investment services in the

4 Journal of Laws of 2002, No. 49, item 447.


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securities field, Council Directive 93/6/EECof 15 March 1993 on the capital adequacy ofinvestments firms and credit institutions andDirective 97/9/EC of the EuropeanParliament and of the Council of 3 March1997 on investor-compensation schemes.

In addition, the Act of 26 October 2000 oncommodity exchanges,5 which will becomeeffective at the end of 2003, has definedother types of financial institution - acommodity brokerage house and a foreignlegal person conducting brokerage activitiesin the Republic of Poland in the form of abranch. These will also be licensed andsupervised by the KPWiG.


At present, the National Bank of Polandmonitors only certain types of entitiesclassified as OFIs, namely co-operative savingsand credit unions and investment funds, alsousing data published by commercial sources(e.g. the financial press). Attention is focusedon their role in financial intermediation,complementary to the banking system. Nospecific reporting scheme is used by theNational Bank of Poland, as the scale of theiractivities is not significant in comparison withthe activities of banks.

The KPWiG collects the statistical data oninvestment funds it needs in order toperform its surveillance duties, which are toidentify classes of investments by funds andto analyse the structure of assets of funds inparticular reporting periods, to assess theparticipation of investment funds in thecapitalisation of the stock exchange and toevaluate the dynamics of the assets ofinvestment funds.

The KPWiG collects statistical data onentities conducting brokerage activities inorder to provide effective supervision, tomonitor the level of financial ratios ofsupervised entities, to assess the risk forassets belonging to clients and placed withbrokerage houses, to monitor and assess the

potential for legal inadequacies in supervisedentities and to counteract any irregularitiesin the functioning of these entities.


The GUS collects data for official statisticalpurposes in accordance with the Act of 29June 1995 on public statistics6 and theRegulation of the Council of Ministers onthe statistical research programme for thepublic statistics7 prepared for each year.


The GUS provides official data on SKOKs.For the years 1998 to 2000, the data werecollected from the National Association ofCo-operative Savings and Credit Unions. Asfrom 2001 (data for 2001), the data arecollected directly from SKOKs under aseparate compulsory reporting scheme.

Investment funds

Under the secondary legislation to the Lawon the public trading of securities and theAct on investment funds, the KPWiG collectsthe data on investment funds it needs (on aquarterly, semi-annual and annual basis) inorder to perform its surveillance duties. Thereporting scheme is compulsory for allinvestment funds. However, KPWiG does notpublish any data concerning investment funds.Semi-annual and annual data are transmittedto the GUS, which compiles official statisticson investment funds.

Brokerage houses

Under the Law on the public trading ofsecurities, the KPWiG, as the supervisorybody, collects data on entities conductingbrokerage activities. The reporting schemeis compulsory. The scope of informationdisclosed varies and depends on the type of

5 Journal of Laws of 2000, No. 103, item 1099, as amended.6 Journal of Laws of 1995, No. 88, item 439, as amended.7 Journal of Laws of 2002, No. 146, item 1227 (for 2003).


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financial institution conducting brokerageactivities.

The KPWiG does not publish any financialdata on supervised entities. Only the numberof securities accounts and the number ofentities conducting brokerage activities areincluded in the Annual Report of the KPWiG.

Data on brokerage activity for officialstatistical purposes are collected by the GUSunder a separate compulsory reportingscheme.



In the case of co-operative savings and creditunions, investment funds and brokeragehouses, the data collected cover the wholereporting population.



Data are derived from a simplified balancesheet (also for the previous year), including -on the assets side - fixed assets, workingcapital assets and accruals, and - on theliabilities side - capital (own funds), reserves,long-term liabilities, short-term liabilities,special purpose funds, accruals and deferredincome, and a profit and loss account showingthe operating profit/loss, gross profit/loss andnet profit/loss. Accounting principles are in

line with the Accountancy Act of 29September 19948. The GUS collects the datain hard copy.

Investment funds

All investment funds submit informationcompiled in compliance with uniform standards.The semi-annual and annual reporting schemecovers the balance sheet, profit and lossaccount, cash flow, specification ofinvestments and additional information. On1 January 2002, there was a substantialchange in the accounting rules for investmentfunds. Until that date, investment funds valuedtheir assets according to prices on thevaluation day. Since that date, the valuationof assets has been made at previous-day prices.

The data are submitted to the KPWiG inhard copy. The possibility of submittinginformation by electronic means is beingconsidered.

Brokerage houses

The relevant reporting scheme, prepared bythe GUS, covers the profit and loss account,the number of customer accounts, the valueof securities held on customer accounts, andthe value of securities in the own portfolioof the brokerage house. The data arecollected in hard copy.

The measurement of financial instruments isfully in compliance with InternationalAccounting Standard No. 39.

8 Journal of Laws of 2002, No 76, item 694.

Table 1Reporting coverage of OFI statistics in PolandData as at 31 December 2001

Type of institution Number Share of assets*)

Co-operative savings and credit unions 126 10%Investment funds 96 76%Brokerage houses 36 14%

*) The total assets of entities presented in the table amounted to PLN 17.5 billion.


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The GUS collects data on an annual basis,starting with data for 1997 (balance sheet).The data are submitted by 31 July of thefollowing year.

Investment funds

The GUS is provided with semi-annual andannual data by the KPWiG by the end ofSeptember and by 15 May in the followingyear respectively.

Brokerage houses

Data are reported to the GUS on a quarterlybasis, with a 25-day lag after the end of thereference period for the first, second andthird quarters. Annual data are submitted by28 February of the following year.



Data on co-operative savings and creditunions, investment funds and brokeragehouses cover the whole reporting population.

1.3.2 Revisions

Data on co-operative savings and creditunions, investment funds and brokeragehouses are not revised after publication.

1.4 Publications


The annual publication �Wyniki finansowespółdzielczych kas oszczędnościowo-kredytowych� (Financial results of co-operative savings and credit unions) isavailable on the GUS�s website(www.stat.gov.pl) on 30 October of the yearfollowing the reporting period.

Investment funds

The publication �Wyniki finansowe towarzystwi funduszy inwestycyjnych� (Financial results ofsocieties and investment funds) is availableon the GUS�s website (www.stat.gov.pl) andin hard copy. Semi-annual data are releasedin September of the same year, and annualdata are released in June of the year followingthe reporting period.

Brokerage houses

The quarterly publication �Wyniki finansowebiur i domów maklerskich� (Financial results ofbrokerage houses) is available on the GUS�swebsite (www.stat.gov.pl) and in hard copy.Data for the first, second and third quartersare released in June, September andDecember respectively. Annual data arereleased in April of the year following thereporting period.

1.5 Users

Users include the National Bank of Poland,banks, financial analysts and other usersaccording to their needs.


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2.1.1 Definitions

Money market

Treasury bills (mainly with original maturitiesof 13, 26 or 52 weeks), National Bank ofPoland bills (predominantly with originalmaturities of 28 days) and interbank deposits(overnight, tomorrow/next day, spot/next,spot/week, two-week, three-week, one-month, two-month, three-month, six-month,nine-month, twelve-month) are the maininstruments traded.

The results of each tender for Treasury billsand National Bank of Poland bills arepublished via Reuters, Bloomberg andTelerate. Monthly data are published in theNational Bank of Poland�s InformationBulletin. Information about tenders forTreasury bills is also available on the Ministryof Finance�s website (www.mofnet.gov.pl).

The Warsaw interbank bid rate (WIBID) andthe Warsaw interbank offered rate (WIBOR)are calculated for overnight, tomorrow/nextday, one-week, three-month, six-month,nine-month and twelve-month.

Reuters provides technical assistance forWIBID and WIBOR fixing.

Capital market

The core of the capital market (excludingequities) is formed by long-term Treasurybonds with original maturities of over oneyear. Treasury bonds with a fixed couponhave the biggest share.

The results of each tender for Treasurybonds are published on the Ministry ofFinance�s website and via Reuters, Bloombergand Telerate.


Spot and forward transactions (overnight,tomorrow/next day, spot/next, spot/week,two-week, three-week, one-month, two-month, three-month, six-month, nine-month,twelve-month), including foreign exchangeswaps, are concluded on the foreign exchangemarket, which is an interbank market. Mostoperations involve US dollars or euro.

The National Bank of Poland disseminatesaverage exchange rates for, inter alia, thePolish zloty against the euro and the Polishzloty against the US dollar (fixing).

Equity market

The Warsaw Stock Exchange (GPW), in itscurrent form, was established in April 1991.It is a joint-stock company, with the StateTreasury, banks and brokerage houses as itsshareholders. The GPW�s listing rules, tradingpractices and disclosure requirements complywith international standards. All transactionsare settled through the National Depositoryfor Securities (KDPW). The settlementsystem is based on T+3 (T+2 for Treasurybonds, T+1 for derivative instruments) anddelivery-versus-payment principles. TheKPWiG supervises the GPW. Informationabout securities issues statistics andderivatives statistics are presented in Sections3 and 4 respectively.

The GPW calculates and disseminates thefollowing indices:

� WIG - a total-return index, weighted bythe market values of companies. Itcomprises shares of companies listed onthe GPW, which should constitute 99%of total market capitalisation. Its basevalue is 16 April 1991 equals 1,000;

� WIG20 - a price index covering theshares of 20 companies listed on theGPW main market with the highestturnover and market capitalisation. Its

2 Financial markets statistics


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base value is 16 April 1994 equals 1,000.The WIG20 is an underlying instrumentfor futures contracts;

� MIDWIG - a price index covering up to40 midcap companies from the main,parallel and free markets which do notqualify for the WIG20. Its base value is31 December 1997 equals 1,000;

� WIRR - a total-return index coveringshares of companies listed on the GPW,which should constitute 1% of totalmarket capitalisation. Its base value is 31December 1994 equals 1,000;

� NIF - a portfolio-price index coveringthe shares of 15 national investment funds(NIFs) received upon the conversion ofNIF certificates issued within theframework of mass privatisation. Its basevalue is 12 June 1997 equals 160; and

� TechWIG - a price index launched on 19May 2000 covering high technologycompanies. Companies included in thisindex are also included in other GPWindices. The base value of the index is 31December 1999 equals 1,000.

In addition, sub-sector indices are calculatedfor the banking, food, construction,telecommunications and informationtechnology sectors.

The GPW also provides the following data:

� the closing price - the price of the lasttransaction in a given security during agiven session;

� the turnover value - the total value of alltransactions concluded for a givensecurity or a given market; turnover onthe GPW is calculated as the sum of thevalues of all buy and sell transactions (i.e.double counted);

� the opening price - (in the continuoustrading system) the price of a security,determined on the basis of orders

accepted before the opening of themarket, with relevant rules governing thesingle-price auction system appliedaccordingly. If no opening price can bedetermined, the price of the firsttransaction in continuous tradingbecomes the opening price;

� the turnover volume - the total numberof securities traded, calculated for a givensecurity or for a given market;

� the exercise price - the price at whichthe issuer of a warrant undertakes tobuy or sell the underlying asset;

� the earnings per share - the net profitfor the last four quarters divided by thenumber of shares in issue;

� the capitalisation - the market value of acompany calculated as the product of thelast trading price of its shares and thenumber of shares in issue;

� the market capitalisation - the total valueof all listed securities (or groups ofsecurities) based on their market prices;

� the price/earnings ratio - the marketvalue of a listed company divided by theaggregate of its profits and losses for thelast four quarters. For companies withan aggregate loss, a ratio is notcalculated;

� the price/book value ratio - a listedcompany�s market value divided by itsbook value; and

� the rate of return - the increase in valueof an investment, including dividends,interest and subscription rights,expressed as a percentage.

National Depository for Securities

The KDPW, which is responsible for theclearing and settlement of transactionsconcluded in public trading, compiles thefollowing data for each type of instrument


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admitted to public trading: the number andvalue of transactions settled in the KDPW,the number, volume and value of registeredoperations as well as the number of issuesregistered in the KDPW, the volume of theissue, the volume of securities registered ininvestment accounts and the capitalisation.

For each instrument with an individual ISINcode, the KDPW compiles the following data:the number, volume and value of transactionssettled in the KDPW, the trading value andaverage price as well as the volume of theissue and the volume of securities registeredin investment accounts.

Data relating to corporate actions are alsoprovided (assimilation, subscription rights,share splits, conversions of shares followinga merger/demerger of public companies,dividends and interest payments as well asbond redemptions). Information aboutsecurities issues statistics and derivativesstatistics are presented in Sections 3 and 4respectively.

Official interest rates of the NationalBank of Poland

The official interest rates of the NationalBank of Poland (the discount, repurchaseagreement (repo), lombard and deposit rates)are available to the public. The repo rate,which refers to the minimum yield on 28-dayNational Bank of Poland bills, is the officialreference rate with regard to currentmonetary policy.


The National Bank of Poland focuses on datarelating to prices of financial instrumentstraded on money, capital and foreignexchange markets, as well as to turnover,open positions and issue sizes. This financialinformation is used in the analysis of shortand long-term expectations for interest rates,exchange rates, market size and market

depth. In addition, these data enable acomparison of the Polish financial marketwith foreign markets, and an assessment ofits development. Data on financial marketssupplement macroeconomic data of importanceto monetary policy-makers.


The National Bank of Poland acts under theAct of 29 August 1997 on the National Bankof Poland.

The National Depository for Securities andthe Warsaw Stock Exchange act under theLaw on the public trading of securities.



WIBID/WIBOR

Interest rates are calculated on the basis ofdata (quotations) provided by ten banks.

Exchange rates

Exchange rates are calculated on the basis ofdata (quotations) provided by a group of banks.


Statistics cover all financial instrumentsregistered at the KDPW.

Warsaw Stock Exchange

Statistics cover all quoted instruments.


WIBID/WIBOR

Fixing is calculated as an arithmetic averageof the quotations provided by ten banks at


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11 a.m. (two extreme quotations arerejected). If the number of quotations is lessthan five, the fixing is not calculated.

Exchange rates

Fixing of the exchange rates of the Polishzloty against both the euro and the US dollaris calculated as an arithmetic average of thequotations provided by a group of the mostrepresentative banks at 11 a.m.


Data are derived from the KDPW�s owndatabase (depository and settlement system).


Data are derived from the GPW�s own database.


WIBID/WIBOR

Daily (since March 1993).

Exchange rates

Daily.


Daily data are used to compile daily, monthlyand annual statistics for publication purposes.


Daily data are available.




Some data (e.g. the number and volume ofissues registered at the KDPW, the volumeof issues on investment accounts, andcapitalisation) are end-of-period data. Otherdata (e.g. the number of transactions) relateto transactions settled during a particularperiod.


Data are end-of-period data (e.g.capitalisation) or relate to trades in aparticular period (e.g. turnover).


WIBID/WIBOR

In the event that fixing is not calculated, theprevious value is carried forward.

Exchange rates

Not applicable.


Information about methodological changes isprovided in publications. In annualpublications, data are presented inaccordance with the new method. Such asituation arose, for example, when thequotation system on the GPW was changed.


GPW indices are reviewed quarterly:

� WIG20 - on the third Friday in March,June, September and December, newcompanies with a high ranking (which


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includes share of total turnover andmarket capitalisation) are added to theindex portfolio. An adjustment coefficienthas been introduced to avoid non-marketchanges.

� WIG - on the third Friday in March,June, September and December, the listof participants (in this index) is changedand the number of shares of individualcompanies included in the index portfoliois determined. An adjustment coefficienthas been introduced to avoid non-marketchanges.

� WIRR - on the third Friday in March,June, September and December, the listof participants (in this index) is changedand the number of shares of individualcompanies included in the index portfoliois determined. An adjustment coefficienthas been introduced to avoid non-marketchanges.

2.3.3 Revisions


Revised data and explanations are providedin the next publication.


Revisions are included in the next publication.

2.4 Publications


Generally, financial markets statistics areavailable via Reuters and Bloomberg.


The publication �System Depozytowo-Rozliczeniowy� (Depository and SettlementSystem), the KDPW�s bulletin, is publishedon a monthly basis in both electronic format

and hard copy. Data in electronic format(pdf and MS Access files) are published onthe KDPW�s website (www.kdpw.com.pl) byaround the 15th calendar day of the monthfollowing the reporting period. Hard copiesare available by around the 22nd calendarday of the month following the reportingperiod.

In addition, a database including daily andmonthly data, with a quering facility, isavailable on the KDPW�s website. It isupdated at about 7 p.m. on each settlementday.


The GPW publishes daily data in electronicformat on its Polish and English websites(www.gpw.com.pl and www.wse.com.plrespectively) one hour after the close of thesession (about 5 p.m.). Until December 2002,data were also disseminated in hard copy inthe GPW�s daily bulletin �Ceduła�, which wasavailable the next day.

National Bank of Poland officialinterest rates

Data are available on the National Bank ofPoland�s website (www.nbp.pl).


National Bank of Poland

� Basic data on financial markets areavailable in the National Bank of Poland�sInformation Bulletin, which is publishedwith a three-month lag.

� The publication �Rynek finansowy wPolsce 1998-2001� (Financial market inPoland 1998-2001) is available inelectronic format (on the National Bankof Poland�s website) and in hard copy.An English version will be alsodisseminated in both electronic formatand hard copy.


Poland


The KDPW publishes annual statistics as aspecial issue of the publication �SystemDepozytowo-Rozliczeniowy� (Depositoryand Settlement System).


� The GPW Monthly Bulletin is publishedin electronic format with a five-day lag.Until December 2002, the GPW Monthly

Bulletin was also disseminated in hardcopy with a ten-day lag.

� The GPW Fact Book, which includesannual statistics, is published with athree-month lag.

2.5 Users

Users are the National Bank of Poland, banks,investors, financial analysts and other usersaccording to their needs.


3.1.1 Definitions

The Polish legal system does not provide ageneral definition of securities pertaining toall branches of law. In general, Polish civillaw makes the assumption that a closed listof securities applies (the principle ofnumerous clauses), i.e. securities may beissued only under a specific legal provisionthat provides for such a possibility. Securitiesregulated by statute include, in particular,shares (issued under the Commercial Code),bonds (issued under the Act of 29 June 1995on bonds9), bank securities (issued under theBanking Act of 29 August 199710), mortgagebonds (issued under the Act of 29 August1997 on mortgage bonds and mortgagebanks11), National Bank of Poland securities(issued under the Act of 29 August 1997 onthe National Bank of Poland12), Treasurysecurities (issued under the Act of 26November 1998 on public finances13) andinvestment certificates (issued under the Actof 28 August 1997 on investment funds14).

Debt securities are securities that createfinancial obligations for an institutional entity(the issuer) in favour of the holder of thesecurity and do not grant the holder anyownership rights in the institutional entityissuing the securities. Interest is paid by theissuer to the holder of a debt security.

Shares are all securities representingownership rights in a corporation. Thesesecurities entitle holders to a share in theprofits of the corporation and to a share inits net assets in the event of liquidation.

Securities can be traded on public markets -the GPW and the regulated over-the-counter(OTC) market - with the permission of theKPWiG, which is the regulatory authorityfor these markets, except for Treasurysecurities and National Bank of Polandsecurities, trading in which is not subject topermission from the KPWiG. Public tradingis regulated by the Law of 21 August 1997on the public trading of securities. TheKDPW serves as a central securitiesdepository and as a central clearing housefor securities admitted to public trading inPoland, with exception for Treasury bills,selected Treasury bonds (non-marketable)and the National Bank of Poland bills forwhich the National Bank of Poland acts as acentral depository and clearing house. Eachinstrument (security) traded on the publicmarket is assigned a code by the KDPW, inaccordance with the ISO 6166 standard(ISIN). The responsibilities of the KDPW


9 Journal of Laws of 2001, No.120, item1300.10 Journal of Laws of 2002, No. 72, item 665, as amended.11 Journal of Laws of 1997, No.140, item 940, as amended.12 Journal of Laws of 1997, No.140, item 938, as amended.13 Journal of Laws of 1998, No. 155, item 1014, as amended.14 Journal of Laws of 2002, No. 49, item 448, as amended.


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include the registration of securities admittedto public trading; the reconciliation of thesize of the securities issue with the numberof securities in trading; the management ofissuers� obligations to holders of securities(corporate actions such as dividend paymentsand splits, etc.); and the settlement oftransactions of securities admitted to publictrading. The KPWiG supervises the KDPW.

National Bank of Poland bills are debtsecurities with an original maturity of lessthan one year issued by the National Bank ofPoland to absorb liquidity from the bankingsector. The issuance of 28-day National Bankof Poland bills has been the main type ofopen-market operation conducted by theNational Bank of Poland since 1998.

Treasury bills are debt securities issued bythe Polish Treasury with an original maturityfrom one to 52 weeks.

Treasury bonds are debt securities issued bythe Polish Treasury with an original maturityof one year or more.

Both debt securities and equity securities(shares, investment certificates, allotmentcertificates and depository receipts) can betraded on the GPW.

Investment certificates are securities issuedby closed-end, specialised closed-end ormixed investment funds.

Allotment certificates are financialinstruments which allow investors who havepurchased rights to shares in a new issue tosell them prior to the introduction of a newissue to trading on the GPW.

Depository receipts are securities documentingownership rights to shares in a foreign company.


For the National Bank of Poland, securitiesissues statistics are complementary to �core�money and banking statistics. They allow for

an analysis of shifts between indirect finance(provided by banks) and direct finance(through securities markets) which may affectthe transmission mechanism of monetarypolicy. They also provide additionalinformation on the economy and on thefinancing of its segments (e.g. generalgovernment, non-financial enterprises) andare used in the assessment of the depth ofcapital markets.

At the Ministry of Finance, the data collectedare used mainly for monitoring generalgovernment debt, financial market analysisand the compilation and dissemination ofgeneral government debt statistics.


The National Bank of Poland collects balancesheet data from banks covering, inter alia,own issues of debt securities and, as fromMarch 2002, data on debt securities issued inthe form of private placements (not admittedto public trading) by residents on thedomestic market. Balance sheet data arecollected in electronic format; data on privateplacements can be submitted in electronicformat or in hard copy. Banks report to theNational Bank of Poland in accordance withResolution No. 3/2002 of the ManagementBoard of the National Bank of Poland of 15February 2002 on the manner and detailedprinciples of submission by banks to theNational Bank of Poland of data necessaryfor the development of monetary policy, theperiodic evaluation of the State�s monetarystance and the evaluation of banks� financialsituation and banking sector risk,15 effectivefrom 31 March 2002, and which replacedResolution No. 15/1999 of the ManagementBoard of the National Bank of Poland16.

The Ministry of Finance collects data underan agreement between the Ministry of

15 Official Journal of the National Bank of Poland of 2002, No. 5,item 9, as amended.

16 Official Journal of the National Bank of Poland of 1999, No. 10,item 15, as amended.


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Finance, the National Bank of Poland and theKDPW, as well as under the Law on thepublic trading of securities and theregulations of the Minister of Finance issuedthereunder.





All banks and branches of foreign banksoperating in Poland submit balance sheet datato the National Bank of Poland.

Data on debt securities issued in the form ofprivate placements on the domestic marketare submitted to the National Bank of Polandby selected banks with dominant positions asdepositories for these securities.

Ministry of Finance

All entities keeping accounts for Treasurysecurities (mainly brokerage houses andbanks) submit data. Reporting agents� selectionprinciples are set out in the Law on thepublic trading of securities.


Statistics cover all securities registered atthe KDPW.


Statistics cover all quoted securities.



Issues of securities (issues of own debtsecurities by banks) constitutes one of the

main monthly balance sheet items. It isbroken down by currency (Polish zloty andforeign currencies), by residency (residentand non-resident), and by original andremaining maturity (the original maturity hasbeen available since March 2002). Banks issuedebt securities in both dematerialised andphysical forms (information about the formis not collected). Information on issues onforeign markets is collected through aseparate reporting scheme for balance ofpayments (b.o.p.) purposes.

The reporting scheme for debt securitiesissued in the form of private placements onthe domestic market covers amountsoutstanding, new issues, redemptions (allreported in nominal value) and the numberof new issues with breakdowns by originalmaturity (short-term and long-term securities,the latter with separate data for issues withan original maturity of over five years) andby sector of the issuer. Data are collectedon a monthly basis.

The National Bank of Poland acts as adepository and clearing house for Treasurybills, selected Treasury bonds (non-marketable)and the National Bank of Poland bills.

Ministry of Finance

All Treasury securities issues exist in book-entry form. Data are collected on a security-by-security basis, according to a code (ISIN)assigned by the KDPW. Statistics coveramounts outstanding. Data are collected inelectronic form. No commercial sources areused. Accounting rules are laid down in theAccountancy Act, in the Law on the publictrading of securities and in regulations issuedthereunder. For issues on foreign markets,no reporting scheme exits.


All securities registered with the KDPW asbeing admitted to public trading aredematerialised.


Poland

Capitalisation is calculated for each type ofinstrument, inter alia, for equities and debtsecurities. Data from the KDPW�s owndatabase are used. Detailed informationabout the method of calculation is includedin KDPW publications.


Data from the GPW�s own database are usedto calculate market values of companies listedon the GPW.



Monthly balance sheet data are submitted tothe National Bank of Poland by the end ofthe 10th working day following eachreporting month. Monthly data on debtsecurities issued in the form of privateplacements are submitted to the NationalBank of Poland by banks by the end of the15th working day following each reportingmonth.

At present, data on debt securities issued inthe form of private placements by residentson the domestic market are for internal useonly.

Ministry of Finance

Daily and monthly data are submitted to theMinistry of Finance. Daily data are providedon the day following the reference day, andmonthly data are provided with a 21-day lag.Daily data are for internal use only.








Data on amounts outstanding are end-of-period data. Data on new issues andredemptions are flow data.

Ministry of Finance, National Depositoryfor Securities and Warsaw StockExchange

Data on amounts outstanding/capitalisationare end-of-period data.



The National Bank of Poland providesinformation about any methodologicalchanges implemented in the banking statisticsreporting scheme.

Ministry of Finance

If the data submitted are incomplete or ifthere are any discrepancies, data from theKDPW or the National Bank of Poland areincorporated into aggregates and anynecessary estimates are made beforepublication.


Information about methodological changes isprovided in publications. In annualpublications, data are presented inaccordance with the new method. Such asituation arose, for example, when thequotation system on the GPW was changed.


Data relate to all shares quoted on the GPW.


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3.3.3 Revisions


Published monthly balance sheet data aresubject to revisions.

Ministry of Finance

No revisions are made.




Revised data are provided in the nextpublication.

3.4 Publications



The National Bank of Poland�s website(www.nbp.pl) is the first available source ofdata for external users.

Data on amounts outstanding (at the amountpaid) for National Bank of Poland bills arepublished in the National Bank of Poland�sInformation Bulletin. The results of eachtender for National Bank of Poland bills,including the value of bids accepted, arepublished via Reuters, Bloomberg andTelerate. Monthly data are published in theNational Bank of Poland�s InformationBulletin.

Ministry of Finance

Monthly data on outstanding debt (Treasurysecurities) are published on the Ministry ofFinance�s websites (www.mofnet.gov.pl andwww.mf.gov.pl) with a two-month lag.

Results of tenders for Treasury securitiesare published on the Ministry of Finance�swebsite after the tender, and via Reuters,Bloomberg and Telerate.


The publication �System Depozytowo-Rozliczeniowy� (Depository and SettlementSystem), the KDPW�s bulletin, is publishedon a monthly basis, in both electronic formatand hard copy. Data in electronic format(pdf and MS Access files) are published onthe KDPW�s website (www.kdpw.com.pl) byaround the 15th calendar day of the monthfollowing the reporting period. Hard copiesare available by around the 22nd calendarday of the month following the reportingperiod.

In addition, a database including daily andmonthly data, with a query facility, is availableon the KDPW�s website. It is updated atabout 7 p.m. on each settlement day.


The GPW publishes daily data in electronicformat on its websites (www.gpw.com.pl andwww.wse.com.pl for the Polish and Englishversions respectively) one hour after theclose of the session (about 5 p.m.). UntilDecember 2002, data were also disseminatedin hard copy in the GPW�s daily bulletin�Cedula�, which was available on the nextday.



� The National Bank of Poland�s AnnualReport is published with an eight-monthlag.

� The publication �Rynek finansowy wPolsce 1998-2001� (Financial market inPoland 1998-2001) is available inelectronic format (on the National Bankof Poland�s website) and in hard copy.


Poland

An English version will be also disseminatedin both electronic format and hard copy.

Ministry of Finance

Monthly results of tenders for Treasury bills,including the values of bids accepted, andinformation on amounts outstanding (at theamount paid) are published in the NationalBank of Poland�s Information Bulletin with athree-month lag.


The KDPW publishes annual statistics as aspecial issue of the publication �SystemDepozytowo-Rozliczeniowy� (Depositoryand Settlement System).


� The GPW Monthly Bulletin is publishedin electronic format with a five-day lag.

Until December 2002, the GPW MonthlyBulletin was also disseminated in hardcopy with a ten-day lag.


� Capitalisation (aggregated) is included inthe National Bank of Poland�s MonthlyBulletin.

� The GUS Quarterly Bulletin.

3.5 Users

The National Bank of Poland, the Ministry ofFinance, banks, investors, financial analystsand other users, according to their needs.


4.1.1 Definitions

The categories of financial derivatives usedin existing statistics are consistent withinternational standards.

A financial derivative contract is a financialinstrument which is linked to another specificfinancial instrument or indicator orcommodity and through which specificfinancial risks (e.g. interest rate risk, foreignexchange risk, equity and commodity pricerisks and credit risk) can be traded in financialmarkets. The value of a financial derivative isderived from the price of the underlying item.

Forward contracts are unconditional contractswhereby two parties agree to exchange aspecified quantity of an underlying item (real orfinancial) at an agreed price (the strike price)on a specified date. This category includesfutures and swaps.

Futures are forward contracts traded onorganised exchanges.

Swaps are contracts whereby the partiesexchange cash flows based on the referenceprices of the underlying items in accordancewith agreed terms.

Options are contracts whereby the purchaseracquires from the seller a right to buy or sell(depending on whether the option is call orput) a specified underlying item at a strikeprice on or before a specified date. It isexercised only if exercising the option isadvantageous to the holder of the option.

Warrants are financial instruments, the priceof which is dependent on the price or valueof an underlying instrument. In the formaland legal sense, a warrant is an unconditionaland irrevocable obligation of its issuer to paythe entitled warrant owner the settlementamount.



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Index participation units are financialinstruments which allow the investor to makea uniform purchase of a complete indexportfolio without the need to purchase theindividual shares which make up that index.

Subscription rights (or pre-emptive rights) arefinancial instruments which represent thepriority rights of shareholders to subscribeto shares in a new issue.

Future contracts, warrants, indexparticipation units and subscription rights arealso traded on the GPW (see Section 2).


Data on derivatives, from official andcommercial sources, are used by the NationalBank of Poland in the analysis of the marketsize, activity and liquidity, and the marketexpectations (e.g. of interest and exchangerates). They are complementary to themacroeconomic data considered whenmonetary policy actions are discussed.

Data on derivatives submitted by banks areused by the General Inspectorate for BankingSupervision (GINB) to monitor the risk towhich individual banks and the banking sectoras a whole are exposed.



The National Bank of Poland collects data onderivatives from banks in accordance withResolution No. 3/2002 of the ManagementBoard of the National Bank of Poland of 15February 2002 on the manner and detailedprinciples of submission by banks to theNational Bank of Poland of data necessaryfor the development of monetary policy, theperiodic evaluation of the State�s monetarystance and the evaluation of banks� financial

situation and banking sector risk17. Data forb.o.p. purposes are collected under theResolution of the Management Board of theNational Bank of Poland of 29 March 1999on the manner and detailed principles ofsubmission by banks to the National Bank ofPoland of data necessary for the compilationof balance of payments and foreign assetsand liabilities of the State18.

National Depository for Securities andWarsaw Stock Exchange





All banks and branches of foreign banksoperating in Poland submit data onderivatives to the National Bank of Poland.

Data on turnover are reported to theNational Bank of Poland by banks with thestatus of money market dealer and bankswhich apply for this status.


Statistics cover all derivatives registered withthe KDPW.


Statistics cover all quoted derivatives.

17 Official Journal of the National Bank of Poland of 2002, No 5,item 9, as amended.

18 Official Journal of the National Bank of Poland of 1999, No 8,item 12.


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Data on financial derivatives are balancesheet and off-balance-sheet data. They arereported in electronic form.

The balance sheet data, available as fromMarch 2002, present the market value ofderivatives creating claims or liabilities.

The off-balance-sheet data are presented interms of the notional (nominal) value of theunderlying items. Breakdowns by type(forward contracts, including futures andswaps, options and complex forwardtransactions - the latter covers caps, floorsand collars), by underlying instrument(interest rates, currencies, securities,commodities, precious metals), by characterof transaction (hedging or speculation) andby counterparty (resident or non-resident)are available.

The National Bank of Poland also collectsother data on financial derivatives, e.g. onturnover for interest rate swaps, forwardrate agreements, currency options andinterest rate options. These are provided inhard copy by banks which have the status ofa money market dealer or which apply forthis status (on a yearly basis). These data areused for internal analysis (only aggregateddata on foreign exchange swaps in which thePolish zloty was involved are disseminated).Data provided to the National Bank of Polandunder this reporting scheme were used forthe purpose of the turnover part of theTriennial central bank survey of foreignexchange and derivatives market activityorganised by the Bank for InternationalSettlements in 1998 and 2001.

In the b.o.p. statistics compiled by theNational Bank of Poland on a cash basis,derivatives are presented as a separate item.Polish banks provide the data. All financialflows resulting from the settlement oftransactions (including variation and optionmargins, but excluding repayable initial

margins) are registered as financialderivatives. Data are collected on a grossbasis, except in the case of foreign exchangeoptions. For additional information, see theECB publication entitled �Accessioncountries: Balance of payments/internationalinvestment position statistical methods�(February 2002).


For futures contracts and index participationunits, the following information is available:number and volume of transactions settledin the KDPW, trading value, average priceper contract, number of individual clientaccounts, number, volume and value ofregistered operations, number of seriesregistered in the KDPW.

For warrants, the following information isavailable: number and value of transactions,trading value, average warrant price, number,volume and value of registered operations,number of series and issue volume registeredin the KDPW.

Detailed information on the method ofcalculation is included in KDPW publications.Data are compiled on the basis of thesettlement date (T+1 for derivativeinstruments).


The main data disseminated include theclosing price, turnover volume and value,opening price and exercise price. GPWstatistics cover concluded transactions.



Data on derivatives, both balance sheet andoff-balance-sheet data, are collected onmonthly basis and submitted to the NationalBank of Poland by the end of the 10thworking day following each reporting month.


Poland

Money market dealers submit monthly databy the end of the 8th calendar day of themonth following the reporting period.

For b.o.p. data, daily data are provided everyten days by the end of the 5th working dayfollowing each reporting period.








Data on derivatives, both balance sheet andoff-balance-sheet data, are end-of perioddata.

Data provided by money market dealers aremonthly turnover data.

B.o.p. data (on a cash basis) reflect paymentsrecorded by the Polish banking system.


Data on the number of individual clientaccounts, the number of series registered inthe KDPW and the issue volume for warrantsare end-of-period data. Other data relate totransactions settled during the particularperiod.


Data relate to trades on the GPW.



The National Bank of Poland providesinformation about any methodologicalchanges implemented in the banking statisticsreporting scheme.

Data on derivatives, reported as off-balance-sheet data, are available as from June 1999.Report forms have not been changed.

Data provided by money market dealers havebeen available to the public since from March2001. Breaks exist as the population of banksreporting to the National Bank of Polandunder this reporting scheme can change onan annual basis. Data are not adjusted.


Information about methodological changes isprovided in publications.


Data relate to all derivatives quoted on theGPW.

4.3.3 Revisions


Data on derivatives, reported as off-balance-sheet data, are subject to revisions. Reviseddata are considered in the next analysis.

Data provided by money market dealers arenot revised.

B.o.p. data are routinely revised in the nexttwo publications. In addition, once a year,the data for the whole calendar year arerevised.




Poland


Revised data are provided in the nextpublication.

4.4 Publications



Balance sheet data on derivatives are includedin items �other assets� and �other liabilities�respectively, and are not presentedseparately.

Data on derivatives, reported as off-balance-sheet data, are included in the publication�Summary Evaluation of the FinancialSituation of Polish Banks� which is preparedby the GINB on a quarterly basis. It includesaggregated data on forward transactions(interest rate and currency swaps, forwardrate agreements, forwards, futures), options(quoted and OTC) and complex forwardtransactions (quoted and OTC) only for thelast month in the quarter. Summaryevaluations are available on the National Bankof Poland�s website (www.nbp.pl) and in hardcopy. The publication is available with athree-month lag.

Data provided by money market dealers onmonthly turnover of foreign exchange swapsin which the Polish zloty was involved arepublished via Reuters and Bloomberg on amonthly basis by around the 15th calendarday of the month following the reportingperiod.

B.o.p. data are published on the NationalBank of Poland�s website with a one-monthlag.


The KDPW publication �SystemDepozytowo-Rozliczeniowy� (Depositoryand Settlement System) is published on amonthly basis in both electronic format and

hard copy. Data in electronic format (pdfand MS Access files) are made available onthe KDPW�s website (www.kdpw.com.pl) byaround the 15th calendar day of the monthfollowing the reporting period. Hard copiesare available by around the 22nd calendarday of the month following the reportingperiod.

In addition, a database including daily andmonthly data, with a query facility, is availableon the KDPW�s website. It is updated atabout 7 p.m. on each settlement day.


The GPW publishes daily data in electronicformat on its websites (www.gpw.com.pl andwww.wse.com.pl for the Polish and Englishversions respectively) with a one-hour lagwith reference to the close of the session(about 5 p.m.). Until December 2002, datawere also disseminated in hard copy in theGPW�s daily bulletin �Ceduła�, which wasavailable on the next day.



� The �Central Bank Survey of ForeignExchange and Derivatives MarketActivity� is a publication disseminated bythe Bank for International Settlements.The results of the last one conducted in2001 have been published in March 2002.

� The publication �Rynek finansowy wPolsce 1998-2001� (Financial market inPoland 1998-2001) is available inelectronic format (on the National Bankof Poland�s website) and in hard copy.An English version will be alsodisseminated in both electronic formatand hard copy.


The KDPW publishes annual statistics as aspecial issue of the publication �System


Poland

Depozytowo-Rozliczeniowy� (Depository andSettlement System).


� The GPW Monthly Bulletin is publishedin electronic format and hard copy witha five-day lag. Until December 2002, theGPW Monthly Bulletin was alsodisseminated in hard copy with a ten-daylag.


� The GUS Quarterly Bulletin.

4.5 Users

The National Bank of Poland, banks,investors, financial analysts and other users,according to their needs.


5.1.1 Definitions

The National Bank of Poland is responsiblefor the compilation and publication ofinterest rate statistics. The term �MFIinterest rates� refers to retail interest ratesthat the reporting agents (banks) offer tocharge on loans and to pay on deposits(advertised nominal rates for standard loansand deposits) vis-à-vis non-financialcorporations and households.19


Direct inflation targeting exercised by theNational Bank of Poland requires short-terminterest rates to be monitored closely.Therefore, the National Bank of Poland�sinterest rate transmission mechanism, whichoperates through interbank market rateswhich, in turn, affect the interest rate policiesof banks, needs to be clearly understood.Interest rate statistics provide relevantinformation on the supply of and demand formoney in the economy, the interbank marketsituation, credit markets and the costs ofbank deposits. At the same time, they allowfactors that determine interest rate levels tobe monitored.

Interest rate statistics enable variousinstitutions to conduct analyses and researchon the money market situation, as well as tomake forecasts and examine relationshipsbetween economic processes and interestrates levels, including foreign capital inflowsand public debt financing, etc.

The National Bank of Poland analyses interestrates on a continuous basis and publishes itsexplanations of interest rates developmentsin the quarterly Inflation Report and theMonetary Policy Annual Report. The NationalBank of Poland has also been working on thedevelopment of the �Small TransmissionModel� project.

The Ministry of Finance also monitorsinterest rate developments since they affectthe cost of public debt financing.


Banks are obliged to report information tothe National Bank of Poland in accordancewith the Act on the National Bank of Polandand Resolution No. 3/2002 of theManagement Board of the National Bank ofPoland of 15 February 2002 on the manner


19 At present, the “MFI” category is equivalent to “banks” inPoland. The term “banks” is therefore used in the rest of thissection.


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and detailed principles of submission bybanks to the National Bank of Poland of datanecessary for the development of monetarypolicy, the periodic evaluation of the State�smonetary stance and the evaluation of banks�financial situation and banking sector risk20.

In particular, Annex 8 of Resolution No. 3/2002 sets out detailed requirements for thescope and timeliness of the submission ofinterest rates to the National Bank of Poland.

For weighting purposes, the balance sheetdata used are derived from the standardreporting system, which was developed underthe Accountancy Act of 29 September 199421

and the following ordinances issued underthis act:

� Resolution of the Minister of Finance of10 December 2001 on the specificprinciples of banks� accounting rules;22

� Resolution of the Minister of Finance of12 December 2001 on model charts ofaccounts for banks;23 and

� Resolution of the Minister of Finance of10 December 2001 on the manner ofprinciples of making provisions relatedto banking activity.24



Interest rate statistics are collected from the11 largest banks by balance sheet volume,which account for 1.5% of all the institutionsclassified in that category. In terms of volume,the 11 largest banks accounted for 73% ofthe total balance sheet at the end ofDecember 2001, for 83% of the deposits andfor 68% of the loans of all Polish banks.

Interest rate statistics are collected only fromheadquarters of banks, since branches offerinterest rates according to headquarters�instructions.


The reporting scheme is uniform for all bankssubmitting interest rate information. SinceMarch 2002, banks have been obliged toprovide interest rate data on the followingtypes of loans and deposits:

PLN loans:

� to corporations:

� overdrafts and

� loans with original maturities of one,two, three, five and over five years;

� to households:

� overdrafts,

� consumer loans,

� loans for house purchases,

� loans for individual entrepreneurs,

� loans for agricultural purposes, and

� other loans.

Data are collected on all types of loans tohouseholds (except overdrafts) with originalmaturities of one, two, three, five and overfive years.

PLN deposits:

� from households:

� demand,

� current accounts, and

20 Official Journal of the National Bank of Poland of 2002, No 5,item 9, as amended.

21 Journal of Laws of 2002, No. 76, item 694.22 Journal of Laws of 2001, No. 149, item 1673, as amended.23 Journal of Laws of 2001, No. 152, item 1727.24 Journal of Laws of 2001, No. 149, item 1672, as amended.


Poland

� deposits with agreed maturities ofone, three, six, 12, 24 and over 24months.

� from corporations:

� demand and


Foreign currency loans:

� USD and EUR loans to corporations andhouseholds (interest rates are calculatedseparately for USD and EUR loans, as atotal for corporations and households):

� overdrafts and

� loans with original maturities of one,two, three, five and over five years.

Foreign currency deposits:

� USD and EUR deposits fromcorporations and households (interestrates are calculated separately for USDand EUR deposits, as a total forcorporations and households):

� demand and


Interest rates are presented as the annualpercentage rate on the reporting date andare submitted to National Bank of Poland byfax.


Interest rate data have been available in theform of advertised rates since 1992, and inthat of average interest rates on depositsand on loans since 1992 and 1996

respectively. They were reported on a ten-day basis until December 1997. Since thatdate, interest rates have been reported on amonthly basis only. Reporting agents areobliged to transmit the data by close ofbusiness on the second working day followingthe end of the month to which they relate.



Data provided by reporting agents are end-of-period advertised data. Interest rates arepresented by the National Bank of Poland astime series with weighted averages. Theweights applied represent the proportion instocks attributable to particular banks in agiven category relative to all the banks withinthe reference group. Weighted average ratesare calculated by the National Bank of Polandfor the following categories of loans anddeposits:

PLN loans:

� to corporations:

� overdrafts,

� loans with original maturities of one,two, three, five and over five years,and

� the average rate for all originalmaturities;

� to households:

� overdrafts,

� weighted average interest rates onloans with original maturities of one,two, three, five and over five years,including fees, and


Poland

� average interest rate of loans tohouseholds and corporations for alloriginal maturities.

PLN deposits:

� from households:

� demand,

� current accounts,

� deposits with agreed maturities ofone, three, six, 12, 24 and over 24months, and

� average interest rate for all agreedmaturities (excluding demand depositsand current accounts);

� from corporations:

� demand,


� average interest rate for all agreedmaturities (excluding demanddeposits);

� average interest rate for all agreedmaturities of deposits from householdsand corporations.

Foreign currency deposits:

� USD and EUR deposits from corporationsand households (interest rates arecalculated separately for USD and EURdeposits, as a total for corporations andhouseholds):

� demand,


� average interest rate for all USD andEUR deposits (excluding demanddeposits).

Foreign currency loans:

� USD and EUR loans to corporations andhouseholds (interest rates are calculatedseparately for USD and EUR loans, as atotal for corporations and households):

� overdrafts,

� loans with original maturities of one,two, three, five and over five years,and

� average interest rate for all USD andEUR loans.


Breaks in series may be caused by changes inthe reporting population (in most cases, dueto mergers and acquisitions) or changes inthe reported categories. The National Bankof Poland provides information about anymethodological changes introduced in thebanking reporting procedure which resultsin a break in series (recent changes wereintroduced in March 2002). Such informationis also published in the methodological notesto the National Bank of Poland�s InformationBulletin and on the National Bank of Poland�swebsite. Time series have not been adjustedretrospectively.

5.3.3 Revisions

Data presented in publications of theNational Bank of Poland are final, but it mayhappen that published data are changed andrevised due to changes resulting from errorsmade by banks. An exception is the averageinterest rates for December, which maychange due to changes in weightings. Theymay change due to the fact that Decemberdata are subject to revision and considered


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final only after the annual balance sheet hasbeen audited and any revisions have beensubmitted to the National Bank of Poland.

5.4 Publications


The National Bank of Poland provides equalaccess to data for all users on the NationalBank of Poland�s website (www.nbp.pl), whichis the first available source of data forexternal users. Weighted average interestrates are published on a monthly basis with afive-week lag.


Interest rate statistics are also included inthe following publications:

� The National Bank of Poland�s InformationBulletin in hard copy - published monthlywith at least a three-month lag,

� The National Bank of Poland�s AnnualReport - published with an eight-monthlag in electronic format on the NationalBank of Poland�s website and in hardcopy.

Publications are available in both Polish andEnglish.

5.5 Users

The Ministry of Finance, banks, financialanalysts and other users, according to theirneeds.

Interest rate statistics are also provided tointernational institutions: the InternationalMonetary Fund, Eurostat and the EuropeanCentral Bank.


Ms Ewa LaskowskaDepartment of StatisticsTel.: (48 22) 653 10 34Fax: (48 22) 826 56 45e-mail: [email protected]

6 Contact at the National Bank of Poland


Poland

Romania


Romania


ACEIR Romanian External Auditors Association - Asociata Contabililor si ExpertilorIndependenti din Romania

ANSVM National Association of Securities Intermediaries - Asociatia Nationala aSocietatilor de Valori Mobiliare

BVB Bucharest Stock Exchange - Bursei de Valori Bucuresti

CHF Swiss franc

CNVM National Securities Commission - Comisia Nationala a Valorilor Mobiliare


EUR euro

GBP pound sterling

JPY Japanese yen



RASDAQ Romanian over-the-counter share market

ROL Romanian leu

SEK Swedish krona

SNCDD National Clearing, Settlement and Depository Company - Societatea Nationalade Compensare, Decontare si Depozitare

UNOPC National Union of Collective Investment Schemes - Uniunea nationala aOrganismelor de Plasament Colectiv

USD US dollar


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1.1.1 Introduction

Other financial intermediaries (OFIs)operating in the capital markets in Romaniaunder the supervision of the NationalSecurities Commission (CNVM) include:

(i) financial investment services companies- financial data reported to the CNVMinclude the analytical trial balance, theshareholders� equity (assets minusliabilities), the debt ratio (total liabilitiesdivided by shareholders� equity) andcertain balance sheet indicators,certified and reported by anindependent external auditor on anannual and semi-annual basis;

(ii) custody agents - financial data reportedto the CNVM include minimum netcapital and certain balance sheetindicators, certified and reported byan independent external auditor on anannual and semi-annual basis;

(iii) investment consultants - statistical datareported to the CNVM include certainbalance sheet indicators, certified andreported by an independent externalauditor on an annual and semi-annualbasis;

(iv) independent registrars - statistical datareported to the CNVM include certainbalance sheet indicators, certified andreported by an independent externalauditor on an annual and semi-annualbasis, and a list of all securities issuersand holders, whether they be naturalor legal persons;

(v) the National Clearing, Settlement andDepository Company (SNCDD) -statistical data reported to the CNVMinclude certain balance sheet indicators,certified and reported by an independent

external auditor on an annual and semi-annual basis;

(vi) the Bucharest Stock Exchange (BVB) -statistical data are reported to theCNVM on request and relate toinformation on the performance ofstock exchange indices (BET and BET-C), daily trading volumes andcapitalisation grouped by tiers, andfinancial indicators from the annualbalance sheet;

(vii) RASDAQ - statistical data are reportedto the CNVM on request and relate toinformation regarding the performanceof the over-the-counter index (theRASDAQ Composite Index), the dailytraded value and capitalisation groupedby tiers, and financial indicators fromthe annual balance sheet;

(viii) open-end investment funds - data arereported to the CNVM by the licensedasset management companies andrelate to the fund�s objectives, thefund�s activities, the current number ofinvestors, the number of fund units inissue and the total funds undermanagement (gross and net);

(ix) venture capital funds - data reportedto the CNVM include financialstatements (balance sheet, profit andloss account, cash-flow analysis), thereport on the company�s activities, andchanges that influence shareholders�equity and the management of thecompany;

(x) investment companies - data arereported to the CNVM by the licensedasset management companies andrelate to the company�s objectives, thecompany�s activities and financialstatements (balance sheet and profitand loss account);



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(xi) asset management companies - datareported to the CNVM relate to thefund�s objectives (the fund�s investmentstrategy for reaching its goals, thereport on activities undertaken duringthe reporting period, significantchanges in the public offer prospectusduring the reporting period, theperformance of the unit net asset value,and any information that might helpinvestors in making decisionsconcerning the fund units), the reportof the external auditor regarding themanagement of the fund�s assets andthe report of the Board of Trusteeson the fund�s activities, the position ofthe fund�s assets and the fund�sobligations calculated quarterly, half-yearly and annually (the assetmanagement company must report tothe CNVM the portfolio structure, thenet asset value and the unit net assetvalue on a weekly basis - the net assetvalue of an open-end fund is calculatedby deducting the obligations from thetotal funds under management);

(xii) depository companies - statistical dataare reported to the CNVM on requestand relate to the accounts of theshares/units issued by the fund or theinvestment companies;

(xiii) exchange companies - the data to bereported to the CNVM according tothe regulations include theperformance of the main economic andfinancial indicators, informationregarding the active members of theexchange company and the auditor�sreport;

(xiv) brokerage companies - the data to bereported to the CNVM according tothe regulations include informationregarding the owners� equity and thedebt ratio, the annual and semi-annualbalance sheet and the annual reportcertified by an external auditor or auditcompany;

(xv) clearing houses - the legal frameworkconcerning statistical data that must bereported to the CNVM is under reviewwith the aim of bringing the currentregulations into line with EuropeanUnion directives, but the statistical datawhich clearing houses will have toreport to the CNVM include the openpositions of each securitiesintermediary and of each clearingmember as well as the degree ofexposure to market risk;

(xvi) traders - the legal frameworkconcerning statistical data that must bereported to the CNVM is currentlyunder development, but data whichtraders will have to report will includetheir open positions and the upper limiton the amount of money allowed to beused for transactions;

(xvii) consulting exchange companies -regulations on the statistical data thatmust be reported to the CNVM are tobe introduced; and

(xviii) audit companies - regulations on thestatistical data that must be reportedto the CNVM are to be introduced.

1.1.2 Definitions

(i) Financial investment services company- a joint-stock company authorised bythe CNVM to carry out, as its soleactivity, the professional intermediationof securities by trading either on itsown behalf (dealer) or on behalf ofthird parties (broker).

(ii) Custody agent - any stock exchange,financial investment services company,bank or other credit institution,insurance company or any other entityauthorised by the CNVM to carry outon its own behalf or on behalf of thirdparties the following activities:


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� holding securities in individual clientaccounts;

� buying or selling securities from/toa clearing, settlement and depositorycompany in order to ensure thesettlement of transactions;

� holding the monetary resourcesneeded for the securitiestransactions in individual clientaccounts;

� managing amounts of money inaccordance with the instructionsgiven by the authorised clearing,settlement and depository companyin order to ensure the settlementof transactions;

� submitting securities transferrequests to an independent registraron behalf of clients;

� sending reports to and receivinginstructions from clients in orderto ensure the effectiveness of theclearing process;

� offering assistance to clientsconcerning information related toshareholder meetings and to otheractivities of the issuers; and

� collecting funds and carrying outpayment operations with regard todividends, interest and any otherbenefits granted by issuers tosecurities holders who are clientsof the custody agent.

(iii) Investment consultant - a natural orlegal person authorised to provideprofessional advisory services to thepublic concerning investments insecurities. Authorised advisory servicesconcerning investments in securitiesinclude securities analysis, portfolioselection services, securities ratingservices and publication activities.

(iv) Independent registrar - a legal personauthorised by the CNVM to maintain aregister of securities holders and tocarry out the following activities:

� the registration of a securitiestransfer in the central register ofthe holders of that security;

� ensuring the transfer of thesecurities in the clearing, settlementand depository system whichfacilitates the issuers� access to thefinancial markets regulated andsupervised by the CNVM; and

� updating and keeping track of thedocumentation indicating the totalnumber of shares or the total valueof a bond issue.

(v) National Clearing, Settlement andDepository Company (SNCDD) - ajoint-stock company authorised by theCNVM to carry out the followingactivities:

� conducting operations with depositedsecurities in accordance withcontracts concluded with issuersand custody agents;

� establishing responsibilities for thesettlement of securities transactionsand carrying out such settlements;

� offering depository and custodyservices, and facilitating settlementby registering securities transactionson client accounts together with anauthorised independent registrar;and

� ensuring access to an independentregistrar authorised by the CNVM.

(vi) Bucharest Stock Exchange (BVB) - apublic institution which:

� ensures an organised framework forcarrying out securities transactions


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on the basis of a system ofprinciples, rules, regulations andprocedures authorised by theCNVM; and

� facilitates the settlement andexecution of contracts in atransparent and correct manner.

HORIZON, the transaction systemused by the BVB, is an electronicsystem (based on the auction system)that ensures the correct andtransparent execution of securitiestransactions. The transaction systemoperates under a regime that relatesto the electronic clearing, depositoryand registration systems of the BVB.

(vii) RASDAQ - the components of theRASDAQ market are the electronictrading system RASDAQ (an adaptationof the PORTAL system developed bythe National Association of SecuritiesDealers in the United States), theSNCDD and the independent registrarsof issuers whose stocks are traded onthis market. The RASDAQ tradingsystem ensures the functioning of ageographically decentralised marketwhose participants are interconnectedthrough a database (using dedicated orexchange lines). The market is createdby the competing financial investmentservices companies which issue bid andask quotations for the tradedsecurities. The transactions may benegotiated by telephone and/orthrough the system. Unlike the stockexchange, which is an auction market,RASDAQ is a negotiation market.

(viii) Open-end investment fund - through acivil company contract and subject tothe authorisation of the CNVM, naturalor legal persons may establish an open-end investment fund without legalpersonality comprising the sum ofcontributions of money to the fund(from a continuous public offering ofparticipation securities documenting

rights of ownership of the fund) and ofthe assets accumulated by investingsuch contributions in a diversifiedportfolio of transferable securities.

The investment strategy of each open-end investment fund is defined andexplained in the Public OfferProspectus for the fund units. Almostall open-end investment funds on theRomanian capital market have investedtheir financial resources in moneymarkets instruments.

(ix) Investment company - a joint-stockcompany with a minimum of 50shareholders whose sole activity is toraise financial resources from naturaland legal persons and to invest them insecurities in accordance with theregulations of the CNVM.

(x) Asset management company - a joint-stock company, set up with the priorauthorisation of the CNVM, whose soleactivity is the administration of open-end investment funds and investmentcompanies.

(xi) Depository company - a joint-stockcompany with which asset managementcompanies deposit the assets of theopen-end investment funds andinvestment companies which theymanage with depository companies, tobe held in trust on a contract basisunder the authorisation of the CNVM.

(xii) Commodity exchange - a joint-stockcompany under the regulation andsupervision of the CNVM which isindependent from the commoditymarket and which provides services forbrokerage companies and their clients.

(xiii) Brokerage company - a joint-stockcompany authorised by the CNVM toact as an intermediary on thecommodity exchange, which has thestatus of a member, an affiliatedmember or a clearing member of a


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commodity exchange. Its object is tonegotiate contracts and to carry outsettlements for its own account or forthe account of third parties.

(xiv) Clearing house - a joint-stock companyestablished by the members of acommodity exchange, banks andinsurance companies, or a departmentwithin a commodity exchange, thatprovides for the registration of futuresand options contracts, the settlementof payments and the clearing of futuresand options contracts.

(xv) Trader - a natural person certified by acommodity exchange and authorised bythe CNVM whose sole activity is thenegotiation of contracts to buy and sellfor his own account on the basis of alicence issued by the commodityexchange.

(xvi) Investment advisory company - a joint-stock company authorised by theCNVM to provide consultancy servicesfor third parties with respect to thetrading system at the commodityexchange, the analysis of spot markets,futures markets and options marketsand to provide commodity marketrating services.

(xvii) Audit company - a joint-stock companyauthorised to provide auditing services.


At present, the National Bank of Romaniadoes not gather statistical informationdirectly from OFIs. At the same time, thereis no formal exchange of information on aregular basis between the National Bank ofRomania and the institutions gathering suchinformation. However, this lack ofinformation had no detrimental impact onthe development and implementation ofmonetary policy since banks dominate thefinancial market and OFIs play an only minorrole in the monetary policy transmission

mechanism. Further increases in the numberand volume of transactions made by OFIs, asseen recently, are expected to change therole they play in the monetary policytransmission mechanism and, hence, the waythe National Bank of Romania conductsmonetary policy.


According to the provisions of Law No. 52/1994 on securities and the stock exchangeand of CNVM regulations in force, capitalmarket entities have an obligation to submitreports to the CNVM on a regular basis.

The entities that must submit reports to theCNVM include the following:

(i) financial investment services companies,independent registrars, the SNCDD,the BVB and RASDAQ;

(ii) asset management companies,depository companies and custodyagents - on their own behalf and on behalfof the open-end investment fundswhose assets they manage or hold; and

(iii) other entities such as the NationalUnion of Collective InvestmentsSchemes (UNOPC) and the RomanianExternal Auditors Association (ACEIR).



Data submitted for the various categories ofreporting agents are as follows:

A.1 Financial investment servicescompanies

� on a monthly basis:

� report concerning the minimumowners� equity and the debt ratio,and


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� analytical trial balance for thereporting month;

� on a half-yearly basis:

� semi-annual balance sheet and

� profit and loss account;

� on an annual basis:

� annual balance sheet,

� report of the Board of Directorsand

� record of changes in theshareholders� register; and

� any other information - at the requestof the CNVM.

A.2 Independent registrars


� independent external auditor�sreport,

� annual balance sheet and

� list of issuers to whom theregistrars provide services; and


A.3 The SNCDD, the BVB andRASDAQ


� independent external auditor�sreport and

� annual balance sheet; and


B.1 Asset management companies

(a) on behalf of the managed investmentfunds:


� financial statements certified byauditors,

� auditor�s report on the annualfinancial statement,

� report concerning investments and

� changes in the number of investors,in the number of outstanding fundunits and in the unit net asset value;


� financial statements in line with theannual ones;

� on a quarterly basis:

� financial statements in line with theannual ones, but not certified by anexternal auditor, including detailedreports on portfolio investments,and

� changes in the number of investors,the number of outstanding fundunits and the net asset value;

� on a weekly basis:

� daily net asset values of themanaged investment funds; and

� any other information - at the requestof the CNVM; and

(b) on their own behalf:





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B.2 Depository companies

� on a weekly basis:

� daily net asset values of theinvestment funds;






� report of the Board of Directors and



B.3 Custody agents









B.4 Investment companies

� on a monthly basis:

� net asset value;









C.1 UNOPC

� on monthly basis:

� reports concerning theauthorisation of investment funds�publicity.

C.2 ACEIR


� reports concerning the association�sactivities.


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Table 1Reporting coverage of OFI statistics in Romania

Type of OFI Number Present asset value(ROL thousands)

as at 31 December 2001

Financial investment services companies 120 227,140,187.16Independent registrars 10 -Open-end investment funds 27 -Venture capital funds 1 -Depository companies 9 -Custody agents 9 -Investment companies 5 -


For financial investment services companies:

� the layout of the report is presentedin Appendix 1 of the Law 52/1994,

� the data collected are based on thetrial balance sheet and

� the report form includes the categoriesof financial instruments used byfinancial investment services companies(information concerning their maturityis provided at the request of theCNVM).

For undertakings for collective investment intransferable securities (UCITS):

� the layout of the weekly reportprovides information on the maturitiesof financial instruments and

� the information requested is notgrouped according to geographicalcriteria.

All the data are collected on paper reports,although some of the reports are collectedby electronic means.

Table 2Monthly financial statement of a typical OFI’s present asset value

No. Type of asset Account number Acquisition Market Present Risk Presentvalue value value coefficient asset value

(stocks)

0 1 2 3 4 5 6 7 = 5 - (5*6)01 Cash 511+512-419*** * 0%

+531+532+541+461.01

02 Certificates of deposit 267-296* * 2%508-590

03 Long-term deposits in 267-296* * 5%commercial banks. 508-590 95%Other papers thatrepresent deposits incommercial banks.Deposits in commercialbanks under thesupervision of theNational Bank ofRomania.


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Table 2Monthly financial statement of a typical OFI’s present asset value

No. Type of asset Account Acquisition Market Present Risk Presentnumber value value value coefficient asset value

(stocks)

04 Treasury bills. 506-590 2%Securities issued by 267-296* 10%local authorities.

05 a) Securities issued by 503+506 30%joint-stock companies which +508-590have been offered for sale tothe public and are traded on aliquid market regulated by theCNVM.

b) Shares and bonds issued by 503+506 20%joint-stock companies for which +508-590the securities intermediary ismarket maker.

c) Shares and bonds issued by 503+506 50%any one joint-stock company +508-590that account for more than 20%of the securities traded by thesecurities intermediary.

06 Securities whose public offerf or sale 503+506 * 40%is still open (the bid price - the trading +508-590fee, for the guaranteed investment).

07 Shares registered with the SNCDD 261-296* * 30%and the independent registrars(at the acquisition price).

08 a) Fund units in open-end 261-296* 25%investment funds.

b) Fund units where the total holding 261-296* 50%in a single open-end investmentfund accounts for more than 20%of the securities traded by thesecurities intermediary.

09 a) Deposits of money to pay for 419** 0%securities purchased on behalfof clients (up to three workingdays after the transaction date).

b) Deposits of securities purchased 30%on behalf of clients and held in 20%50%the securities intermediaryaccount, with the appropriate riskcoefficient (more than threeworking days after the transactiondate).

10 Deposits in a depository company 267-296* 8%licensed by the CNVM.

11 Guarantee reserves made in 267-296 8%accordance with the regulationsin force for each financial market.

12 Deposits placed with another 267-296 2%securities intermediary, based ona settlement contract authorisedby the CNVM.

13 Shares and bonds issued by 503+506 * 100%joint-stock companies which are not +508-590traded on a regulated market, orwhich are traded on a regulatedmarket but have been restricted for aperiod of time longer than two weeks.

14 TOTAL ASSETS * * *


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A.1 Financial investment servicescompanies

Monthly reports must be received by theCNVM within ten business days of the endof the reporting month.

Semi-annual reports must be received by theCNVM within five business days of the dateestablished by the Public Finance Departmentas �the deadline for submission of the balancesheet�.

Annual reports, certified by an independentexternal auditor, must be received by the CNVMwithin five business days of the date establishedby the Public Finance Department as �thedeadline for submission of the balance sheet�.

A.2 Independent registrars

Annual reports must be received by theCNVM within 15 days of the certification ofthe balance sheet by the Ministry of Finance.

B.1 Asset management companies

Weekly reports must be received by theCNVM on the Monday of the week followingthe reporting period.

Quarterly reports must be received by theCNVM within 60 days of the end of thereporting period.

Semi-annual reports must be received by theCNVM within 60 days of the end of thereporting period.

Annual reports must be received by the CNVMwithin 60 days of the end of the reportingperiod.

B.2 Depository companies

Weekly reports must be received by theCNVM on the Monday of the week followingthe reporting period.


Annual reports must be received by theCNVM within 60 days of the end of thereporting period.

B.3 Custody agents



B.4 Investment companies

Monthly reports must be received by theCNVM within ten days of the end of thereporting period.



C.1 UNOPC

There are no deadlines for the submission ofreports by the UNOPC.

C.2 ACEIR

There are no deadlines for the submission ofreports by the ACEIR.



Financial data are collected by the CNVMfor the supervision of capital market entitiesand no statistical analysis is made.


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1.3.2 Revisions

None.

1.4 Publications

Statistical data collected by the CNVM fromentities subject to regulation and supervisionby the CNVM are not published on a regularbasis.

1.5 Users

Data are collected by the CNVM forsupervision purposes and are not intendedfor the use of any individuals.


2.1.1 Definitions

The Romanian money market is defined as acontinuous market in which deposits aremade or received in Romanian leu at aninterest rate established freely by the market.

The interbank money market comprises allbanks licensed by the National Bank ofRomania, and their conduct is governed byspecific rules issued by the National Bank ofRomania.

It is compulsory for banks to offer rates forat least the following maturities: overnight,one week, one month, three months, sixmonths, nine months and one year.

The Romanian foreign exchange market isgoverned by National Bank of RomaniaRegulation No. 3/1997 and is a continuousmarket for interbank, corporate and personalforeign exchange transactions, with specificprovisions for each category.

Access to the interbank foreign exchangemarket is subject to the prior authorisationof the National Bank of Romania under theprovisions of Norm No. 1 of the aboveregulation.

Banks authorised to perform transactions onthe Romanian interbank foreign exchangemarket are obliged to display binding or, at

least, informative rates for at least six of thehard currencies published on the NationalBank of Romania�s indicative rate list (USD,EUR, CHF, GBP, JPY, SEK etc.).

The Romanian capital market includes all theentities listed in Sub-section 1.1.2 above. Thesecurities currently traded on the BVB andRASDAQ are mostly shares issued by publicjoint-stock companies. In addition, municipalbonds with maturities longer than one yearare also traded on the BVB. Treasury noteswith maturities longer than one year will betraded from the end of 2002 provided thatthe financial investment services companiesmeet the minimum capital requirementsunder the regulations in force.

The commodities exchanges are regulatedand licensed markets which provide theirmembers and clients with centralisednegotiating and risk management facilitiesthrough clearing and depository systems fortransactions such as:

� sales or acquisitions on the spot marketor futures market of agriculturalproducts or unprocessed raw materialswhich, by their nature, are fungiblegoods or which, by design, aretransferable goods;

� sales or acquisitions, using spot orforward, futures and options contracts,on the spot market or futures marketrespectively of commodity securities



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(e.g. warehouse warrants, bills oflading, cargo insurance policies andother similar instruments authorisedand regulated by the CNVM);

� sales or acquisitions on the futuresmarket of money market or financialmarket instruments or derivativeswhose underlying assets are moneymarket or financial market instruments,or any other instruments authorisedand regulated by the CNVM;

� cargoes, ships and cargo insurancepolicies; or

� sales or acquisitions of other financialinstruments authorised and regulatedby the CNVM.


Financial market statistics are very importantfor the monetary policy transmissionmechanism. There are statistics on the moneymarket (the interbank money market andthe primary and secondary markets forgovernment securities) and the foreignexchange market.


According to the regulations in force, theCNVM is an independent administrativeauthority that carries out regulatory andsupervisory tasks such as authorising,exempting, banning, investigating and issuingpenalties to participants in the capital market.



The CNVM collects data from the BVB, theNational Association of Securities Intermediaries(ANSVM), the SNCDD and the National

Bank of Romania. The data are submitted atthe request of the CNVM.

The National Bank of Romania, which is theMinistry of Finance�s agent for the issuing ofTreasury bills, publishes information via Reuterson the most recent Treasury bills auction(amount settled, participants, average yield,minimum and maximum accepted rate, etc.) andprovides data on all Treasury bills in circulation.


Financial investment services companies mustreport information on their securitiesportfolio to the CNVM. The reports whichthe companies submit to the CNVM mustcontain the following information:

� the ticker symbol of the security held;

� the quantity held;

� the acquisition price; and

� the market price of the security at theend of the reporting period.


No specific information is available.



The data collected refer to the end of thereporting period.

Data published via Reuters relate to Treasurybills issued. Following the implementation ofthe new regulations on the Treasury billmarket, it will be compulsory for all banks todisplay on-line rates for Treasury bill issuesin circulation.


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Not applicable.

2.3.3 Revisions

Not applicable.

2.4 Publications


Not applicable.


Not applicable.

2.5 Users

The main users of statistical data on thefinancial markets are investors (natural andlegal persons), employees of participants inthe capital markets, financial analysts andsecurities agents.


3.1.1 Definitions

The National Bank of Romania is empoweredto act as the state agent for the sale,registration, transfer and settlement ofgovernment securities. The legal frameworkfor the market in government securities iscontained in Law No. 81/1999 on public debt,Convention No. 16813/19 concludedbetween the Ministry of Finance and theNational Bank of Romania on 17 March 1998and Regulation No. 2/1997 on governmentsecurities operations.

Regarding statistics on public offers of securities,the CNVM receives raw data in hard copy.This information is sent to the CNVM byeach issuer and is not statistically analysed.


The only data of this kind available to theNational Bank of Romania are thoseregarding statistics on issues of governmentbonds and Treasury bills. The information istherefore particularly important for theanalyses used as a basis for monetary policydecisions, since the strategy of deficitfinancing and public debt refinancing -

especially the related costs - is one of themain factors influencing the National Bank ofRomania�s interest-rate policy. The main dataused by the monetary authority are theinterest rate, the amount of bills on offer,the term structure of interest rates, thetimetable of issues and their denomination.


Romania does not have a separate institutionor agency which is able to collect informationon securities issues for official statisticalpurposes.

On the basis of Article 45 of Law No. 81/1999 on public debt, the Ministry of Financekeeps ledgers in which information on publicdebt (including government securities andstate guarantees) are recorded. The ledgerscontains data regarding the public debt, itsvalue, the level of interest, commissions andother information in chronological order.

At the same time, in accordance with Articles44 and 47 of the Law No. 72/1996 regardingpublic finance, each year the Ministry ofFinance provides a general account of publicdebt which is attached to the general annualaccount for the execution of the state budget.



Romania



No specific statistical framework has thus farbeen organised for securities issues. Availableprimary data rely on different sources.


The general account of public debt (includinggovernment securities) has two parts: theaccount of internal public debt and theaccount of external public debt to which isattached an account of governmentguarantees for internal and external credits.

The accounts cover direct borrowing fromthe internal financial market, includingborrowing from the resources of the statetreasury, indicating the type of borrowing,the term, the starting balance both at theaggregate level and for each group ofinstruments, new borrowing, repayments andthe balance at the end of the period.

The same criteria are applied to the externalpublic debt.


No specific information is available.




No adjustments are made for any types ofbreak in series.

3.3.3 Revisions

Not applicable.

3.4 Publications


Relevant publications (first publication) forgovernment securities statistics (new androll-over issues):

� Annual report, National Bank ofRomania;

� Monthly Bulletin, National Bank ofRomania;

� Macroeconomic Indicators, NationalBank of Romania.

The National Bank of Romania also publishesa wide range of data on its website(www.bnro.ro). The following governmentsecurities statistics (new and rollover issues)are available:

� interest-bearing Treasury bills:

� nominal value and

� average interest rate; and

� interest-bearing bonds:

� nominal value and

� average interest rate.


There are no relevant publications other thanthose given in Sub-section 5.4.1.

3.5 Users

All interested users.


Romania


4.1.1 Definitions

The main categories of derivatives on theRomanian capital market are:

(i) option contracts - standardisedcontracts which, in exchange for thepayment of a premium, create for thebuyer of the option the right, but notthe obligation, to buy (call option) orto sell (put option) a certain underlyingasset at a predetermined price, the�exercise price�, up to or on the expirydate;

(ii) forward contracts - standardisedcontracts with negotiable terms andwith a maturity agreed between theparties. The maturity of a forwardcontract may be up to 18 months, butnot less than ten days; and

(iii) futures contracts - standardisedcontracts which create for each partythe obligation either to sell or buy acertain underlying asset on the maturitydate at a price agreed upon at the timethe transaction is concluded. Theobligations under the contract must bemet in no more than ten days. Thematurity of a futures contract may beup to 18 months, but not less than tendays.


Financial derivatives statistics are not availableto the National Bank of Romania since themarket for these instruments is still underdevelopment. Monetary policy analyses donot use information about financialderivatives.


The regulations issued by the CNVM, as theregulatory, supervisory and control authorityfor the commodities and derivatives markets,include information about forms, deadlinesand the means by which data must bereported.



At present, information regarding derivativestransactions is not reported to the CNVM,but the new capital market regulations willlay down the specific data required and thedeadlines by which they will have to bereported to the CNVM.


The system and the means used in thereporting of the statistical data will be laiddown in the new capital market regulations.


These will be laid down in the new capitalmarket regulations.


4.3.1 Definitions and methodology

These will be laid down in the new capitalmarket regulations.



Romania


How these are to be dealt with will be laiddown in the new capital market regulations.

4.3.3 Revisions

How these are to be dealt with will be laiddown in the new capital market regulations.

4.4 Publications


At present, the CNVM does not publish anystatistical analyses. The capital market entitiespublish statistical data via the media, in theirown bulletins and on their own websites -

on that of the Romanian CommoditiesExchange (www.brm.ro) and on that of theSibiu Monetary-Financial and CommoditiesExchange Sibiu (www.bmfms.ro).


See Sub-section 4.4.1.

4.5 Users

The main users of financial services regardingderivatives and statistical data on theregulated commodities markets are theparticipants in these markets (hedgers,speculators, brokers, traders and financialanalysts) and their staff.


5.1.1 Definitions

Banks calculate:

lending rates for

� non-bank customers,

� credit in Romanian leu (overdrafts andloans by maturity - short-term andmedium to long-term) to the non-government sector, to companies,households and other customers(insurance companies, private non-profit institutions), and

� credit in Romanian leu to the government(Treasury bills, other governmentcredits, deposits with the StateTreasury, other); and

deposit rates for

� non-bank customers,

� demand and time deposits in Romanianleu from companies, households, andother customers (this also includesrestricted deposits and certificates ofdeposit), and

� deposits in Romanian leu from publicinstitutions (extra-budgetary funds,deposits received by banks from theState Treasury).


Interest rates applied by the banks are amongthe key indicators used in monetary analysisand monetary policy decisions. They havebeen gaining in importance, in particular lastyear, as the capacity of the National Bank ofRomania to influence these rates hasincreased and as the macroeconomicresponse to their movements has becomemore elastic.



Romania


According to Article 51 of Law No. 101/1998 on the Statute of the National Bank ofRomania, the National Bank of Romania isentitled to collect information from bankswhich are licensed by the National Bank ofRomania. Within this framework the banksreport interest rates.

The legislation referred to in this sub-sectioncan be found on the National Bank ofRomania�s website.



The reporting of Romania�s financialinstitutions covers the National Bank ofRomania and banks. There are 42 operationalcommercial banks, including 34 Romanianjoint-stock companies and eight branches offoreign banks.

Table 3Reporting coverage for MFI interest rate statistics in RomaniaAs at 31 December 2002

Type of reporting agent Reporting coverage Interest receivable Interest payable(total value of retail (total value of retail

interest receivable on interest payable on balance sheets) balance sheets)

Number of Percentage Percentage Percentagereporting agents of the total of the total of the total

category balance sheet balance sheetof all institutions of all institutions

National central bank 1 100 0.2 0.2Credit institutions 40 100 0.8 0.4

Banks and branches of 39 100 0.8 0.4foreign banksCredit co-operatives 1 100 Not collected yet Not collected yet

Other MFIs - - - -

Total 41 - 1.0 0.6


The National Bank of Romania collectsprimary data from banks for interest ratestatistics purposes pursuant to Law No. 101/1998 on the Statute of the National Bank ofRomania and Law No. 58/1998 (the BankingAct).

Interest rates applied by banks (lending anddeposit rates) are compiled by the StatisticsDepartment of the National Bank of Romaniaon a monthly basis. Data are collected inhard copy and through the interbankcommunications network.

The methodological rules laid down for thedata which banks are requested to transmitto the National Bank of Romania are asfollows:

� The average debit balance (loans) andcredit balance (deposits) are calculatedas monthly daily averages.

� The monthly interest is calculated bymultiplying the interest rate by thedebit balance/credit balance for theperiod of time over which the interestis calculated using the following formula:


Romania

where

D = interest to be received or interest tobe paid (ROL millions),

s = daily debit balance (for loans)/creditbalance (for deposits) (ROL millions),

r = the annual interest rate (%), and

t = number of calendar days for which theinterest is calculated (within thereporting period).

� The average interest rate is calculatedas a weighted arithmetic average.


The National Bank of Romania providesinformation about any change in methodologyimplemented in the reporting procedure forbanks which results in a break in series.There have been no adjustments in data timeseries thus far.

Commercial banks provide data on lendingand deposit rates to the National Bank ofRomania by the end of the 15th day after theend of the reporting period.



The interest rates provided by reportingbanks are weighted average rates. Theaverage interest rate is calculated on amountsoutstanding.

Lending rate: weighted monthly average ratecharged by commercial banks on loans (in

domestic currency) to resident non-bankcustomers (economic agents, individuals,general government, other).

Deposit rate: weighted monthly average ratepaid by commercial banks on demand, timeand savings deposits (in domestic currency)of resident non-bank customers and ongovernment deposits.


No adjustments are made for any kind ofbreak in series under the present datacollection system.

5.3.3 Revisions

Data may be subject to revision afterpublication, mainly due to updating needs.No specific rules are applied. Explanatorynotes for revised data are inserted in thepublication.

5.4 Publications


Relevant publications (first publication) forinterest rate statistics:

� Annual report, National Bank of Romania;

� Monthly Bulletin, National Bank ofRomania; and

� Macroeconomic Indicators, NationalBank of Romania.

The National Bank of Romania also publishesa wide range of data on its website eachmonth. The following interest rates statisticsapplied by banks are available:

lending rates (average) for

� non-bank customers and

D =∑ s x r x t100 x 365


Romania

� interbank operations (including lendingto the National Bank of Romania); and

� deposit rates (average) for

� non-bank customers and

� interbank operations (including depositsfrom the National Bank of Romania).


There are no relevant publications other thanthose given in Sub-section 5.4.1.

5.5 Users

The National Bank of Romania provides equalaccess to data for all users according to thecalendar of data dissemination published onits website, which is the first available sourceof data for external users. The main users ofMFI interest rate statistics are the NationalBank of Romania, the Ministry of Finance,academic institutions, economic agents andratings agencies.


Mr. Virgil Stefanescu - Division ChiefStatistics Department/Statistical Analysis andInformation DivisionTelephone: 004021-315-2836Fax: 004021-312-7193E-mail: [email protected]

6 Contacts at the National Bank of Romania


Romania

Slovakia


Slovakia


ANNA Association of National Numbering Agencies

BCPB Bratislava Stock Exchange - Bratislavská burza cenných papierov

CSD central securities depository

DEM Deutsche Mark

EUR euro

FMA Financial Market Authority



KBB Bratislava Commodity Exchange - Komoditná burza Bratislava




OSDA NBS Treasury Department of the National Bank of Slovakia - Odbor správydevízových aktív Národná banka Slovenska



SBCP Slovak Securities Stock Exchange - Slovenska Burza Cennych Papierov

SCP Securities Centre of the Slovak Republic - Stredisko cenných papierov

SDDS Special Data Dissemination Standard

SKK Slovak koruna

SOSR Statistical Office of the Slovak Republic

USD US dollar


Slovakia


1.1.1 Introduction

The financial sector consists of allcorporations and quasi-corporations thatdeal mainly with financial intermediation and/or auxiliary financial operations. Financialintermediation comprises such activities asthe acquisition of financial assets and, at thesame time, the acceptance of commitmentsfor the institutional entity�s own account inthe context of its own financial transactionson the market. Auxiliary financial activitiesare activities which are closely connectedwith financial intermediation, but which arenot per se financial intermediation.

The other financial intermediaries sector(OFI sector) in Slovakia includes mainlysecurities dealers and trust companies. Inview of the fact that banks (which belong tothe monetary financial institution (MFI)sector) can also be securities dealers, thereis no strict separation of the MFI and OFIsectors. The Financial Market Authority(FMA) has thus far collected informationfrom OFIs within the framework of statutoryrequirements to provide information forsupervisory purposes.

1.1.2 Definitions

Securities dealers are joint-stock companieswith their registered headquarters in theterritory of Slovakia that provide investmentservices on the basis of a licence for theprovision of financial services granted by theFMA.

Foreign securities dealers are legal entitiesor natural persons registered outside Slovakiathat provide investment services and havelicences for the provision of such servicesgranted in the country in which they areregistered.

Trust companies are legal entities that collectfunds from the public on the basis of a publicnotice for the purposes of investing thesefunds in assets defined by law, that use saidassets to create and manage mutual fundsand that perform as trustees in mutual funds.

Foreign trust companies are foreign legalentities licensed to conduct business in the areaof collective investment by the relevant authorityof the country in which they are registered.

Trust companies manage mutual funds. Thereare three kinds of mutual funds acknowledgedby law - open-end, closed-end and specialisedmutual funds. Each mutual fund is obliged tohave statutes that include, in addition toother provisions, a description of the fund�sinvestment strategy.


he FMA uses the information collected forcapital market analysis. It is obliged by law topublish such data annually. The central bankneeds statistical data and information on OFIsto monitor their role in financial intermediationand, together with MFI statistics, to providea comprehensive picture of financialintermediation in the financial market.Monitoring OFIs helps the central bankensure that the list of MFIs remains up-to-date, accurate and as homogeneous as possible.


The mandate of the FMA to collectinformation from securities dealers datesback to Act No. 566/2001 Coll.1 on securitiesand investment services, which has been inforce since 1 January 2002. Under that act,both securities dealers and foreign securitiesdealers are obliged to submit data from theiraccountancy records and statistical data to




Slovakia

the Ministry of Finance (MoF) and the FMAin the manner and at the time stipulated inthe relevant MoF Decree. The aforementionedobligations relate to all dealers and foreigndealers.

The FMA is not authorised to require trustcompanies to submit statistical information.However, trust companies submit a reporton their economic performance and on themanagement of assets in mutual funds to theFMA on a biannual basis. Moreover, trustcompanies are obliged regularly to discloseinformation about the sale and redemptionof shares in mutual funds administered bythem.

The FMA is authorised to require supervisedentities to submit the data, documents andinformation necessary for supervisory purposes.



Reporting agents are securities dealers, trustcompanies and mutual funds which aremanaged by trust companies. There are threekinds of mutual funds: open-end, closed-endand specialised mutual funds. At present,detailed information about the collectionprocedure (i.e. the number of reportinginstitutions, the coverage of data collected,etc.) is not available, because the new ActNo. 566/2001 Coll.1 set out new conditionsin this field. Therefore, some institutions haveto be re-licensed. The deadline for thistransformation expires at the end of 2002.More information in this area will becomeavailable after that date.

The submission of information and reportsto the FMA, as a form of meeting statutorydisclosure requirements, applies equally toall securities dealers and foreign securitiesdealers, and to all trust companies andforeign trust companies.


Securities dealers and foreign securitiesdealers are obliged to submit reports ontheir economic performance to the FMA ona biannual basis. These reports include, inparticular, financial statements, detailedreports on the financial situation andinformation on the prospective economic andfinancial situation. The reports are submittedin hard copy.

Trust companies and foreign trust companiesare obliged to submit reports on theireconomic performance and on themanagement of assets in mutual funds to theFMA on a biannual basis. The reports includenot only financial statements, but alsodetailed data on the structure and value ofthe assets in the mutual funds.


The reports on economic performance arecurrently submitted on a biannual basis, withthe semi-annual report being submittedwithin two months of the end of the calendarhalf-year; and the annual report within fourmonths of the end of the calendar year inthe case of trust companies and within fivemonths in that of securities dealers.



None.

1.3.2 Revisions

None.


Slovakia

1.4 Publications

At present, there are no publications available.

1.5 Users

The FMA collects data for the purposes ofsupervision, and uses them subsequently inpreparation of its capital market analysis.


2.1.1 Definitions

The interbank money market is a specialsegment of the money market where thebanks trade with each other, or with thecentral bank. The interbank market is notinstitutionalised, but is created through directlinks between the individual entities viainternet and telephone connections. Thesettlement of transactions is effected throughclearing. The Banking Clearing House carriesout clearing in Slovak koruna (SKK) betweenbanks registered in Slovakia.

Deposit trades represent the major portionof the interbank money market, followed byswaps. Forward contracts and interest rateswaps are traded to a lesser extent.Repurchase agreement (repo) transactionsand other trades on the secondary securitiesmarket are carried out rather sporadically.Since 1 February 2002, the National Bank ofSlovakia has started to manage its monetarypolicy through the overnight refinancing andthe overnight sterilisation rates which forma corridor for interbank money marketlending rates corridor. This change hasbrought stability to the money market as aprerequisite for its further development andcreation of derivatives.

The sole organiser of debt securities tradingon the secondary market is the BratislavaStock Exchange (BCPB). The debt securitiestraded there are government bonds,corporate bonds, bank bonds, municipalbonds and mortgage bonds. Governmentbonds are most frequently traded. As at 31

March 2002, 90 bond issues were registered,65 of which were listed.

Trading in corporate shares (more than 99%)takes place predominantly on the BCPB; itsactivities are set out in Act No. 330/2000Coll.3 on the securities stock exchange. It isthe main organiser of the secondary marketin Slovakia. The SAX is the official stockindex of the BCPB. It is a capital-weightedindex which compares the market capitalisationof a selected set of shares with the marketcapitalisation of the same set of shares as ofthe reference day. No transactions have beencarried out on the derivatives market thusfar. The supervision of the capital market iscarried out by the FMA pursuant to Act No.96/2002 Coll.3 on the supervision of thefinancial market.

In January 2002, the Slovak Stock Exchange(SBCP), which organises supply and demandin the field of securities only, startedoperations. In addition to trading insecurities, the SBCP provides economicinformation on issuers and the tradability ofindividual issues, as well as backgroundinformation on the pricing of portfolios andtechnical consultations.

The exchange rate of the Slovak Koruna onthe Slovak foreign exchange market has beenfixed since the introduction of the Slovakcurrency in February 1993. The Slovak

2 Financial market statistics2

2 The term “financial markets” refers to the domain of moneymarkets, capital markets, foreign exchange markets andcommodity markets. Some of the items in this section havealready been treated in the other sections - notably, securitiesissues and financial derivatives statistics. The presentation ofthe material in this sub-section should, however, be organisedalong the lines portrayed in Sub-section 5.1.1.



Slovakia

koruna was pegged to a currency basket thatinitially comprised five currencies, in the samemanner as the Czechoslovak koruna hadbeen. This five-currency monetary basket wasreplaced with a two-currency basketcomprising the Deutsche Mark (60%) andthe US dollar (40%) in July 1994. TheNational Bank of Slovakia conductedtransactions with commercial banks withinthe framework of foreign exchange fixing.On the basis of the actual rates on theforeign exchange market, the National Bankof Slovakia shifted its calculated rates withinwhat was known as the fluctuation band of±7%. On 1 October 1998, the National Bankof Slovakia changed both the regime of fixedexchange rates and the system of peggingthe exchange rate to a currency basket,moving to a regime of floating exchange rates(in which the exchange rate of the Slovakkoruna is determined solely by the market).If the development of the exchange rate isnot in line with the goals of the NationalBank of Slovakia�s monetary policy, thecentral bank intervenes directly in the foreignexchange market. Upon the abolition ofexchange rate peg to the currency basket,the Deutsche Mark served as a referencecurrency for the Slovak koruna from 1October 1998 to the end of that year. It wasthis currency, and the euro as from January1999, that was used by the National Bank ofSlovakia for interventions in the foreignexchange market. Transactions betweenSlovakia and foreign banks take place in theforeign exchange market in Slovakia. Swaptransactions, most of which have the USdollar as the reference currency, account forthe largest proportion of all foreign exchangetransactions in the market, followed by spottransactions, in which the euro is thepredominant reference currency, andforward transactions, the proportion ofwhich is insignificant.

The KBB was established pursuant to theAct No. 299/1992 on the commoditiesexchange. The supervisory authorityresponsible for the KBB is the Ministry ofthe Economy of the Slovak Republic, whichcarries out this task through the Exchange

Commissioner/Trustee/Agent. The supervisorybody is entitled to ask the KBB for anyrelevant information with regard to tradeson the exchange.

The KBB, which is the only operationalcommodity exchange in Slovakia, ensures atransparent commodity market in Slovakia. Itis possible to conduct spot and term tradesat the KBB, with a material delivery of goods.Given that derivatives are not currentlytraded at the KBB and that only deliverytrades are carried out, the KBB has not beenincluded in the category of financial marketinstitutions.


Financial markets statistics broaden theanalysis of the transmission mechanism ofmonetary policy. They also support thereview of financial stability and developmentsboth within the financial market and inrelation to the external sector. Moreover,they offer a wide range of financialinformation for monetary policy analysis andcontribute data on asset price developments.


The National Bank of Slovakia has a soleright to collect data from banks and foreignbanks� branches pursuant to the NationalBank of Slovakia�s Regulation on reporting(see Section 5). Other institutions do notcollect data on the financial market forstatistical purposes.



The National Bank of Slovakia collects theinformation directly from the commercialbanks via electronic media.


Slovakia

The securities exchanges provide the FMAwith statistical data on trading in thepreceding period. The Securities Centre ofthe Slovak Republic (SCP) provides data onthe volume of securities transfers.


Only the National Bank of Slovakia has thelegal power under its Regulation on reportingto collect data on the foreign exchangemarket for statistical purposes.

The methodology used for collecting data isdefined by the Statistics Department via thesystem of internal reports and cross reports.The accounting rules are regulated by theMoF.

The data collected on the foreign exchangemarket include details of the type oftransaction, the name of the bank, the nameof the counterparty, the transaction volume,the performance date of the transaction, thevalue date, the maturity date (in the case ofswaps), the spot foreign exchange rate and,in the case of swaps and forwardtransactions, also the forward rate. Data areadjusted for double entries and sent inelectronic format.

The FMA does not have the legal right tocollect statistical data on financial markets.All entities are obliged to submit the requireddata, information and documents to the FMAfor the purposes of supervision.


Banks report all the derivative transactions(forward and swap) they carry out,irrespective of their maturity, for all workingdays over the last ten days.

Data of the foreign exchange market arecollected from commercial banks every tendays, with a submission deadline of up to fivedays after the reference period.



Data on the foreign exchange marketrepresent the sum total of all transactionscarried out in the respective ten-day periods;they are not average values.


None

2.3.3 Revisions

None

2.4 Publications


Foreign exchange market data are part ofthe �Monetary Survey�, which is usuallypublished with a one-month delay in the formof text and numerical data, given as changesin comparison with the preceding month,without tables. They are also published onthe National Bank of Slovakia�s website.


Foreign exchange market data in the form oftables are published, on a monthly basis, onthe Reuters �NBSK02� page.

Until 10 October 2000, the National Bank ofSlovakia assured the fixing of interest ratesfor all standard maturities, from overnight to12 months. The fixed rates - Special DataDissemination Standard (SDDR) datacategories, interest rates and BRIBOR - werepublished via the Reuters �NBSK07� pageimmediately after the fixing at around 11a.m., on the same day at around 5 p.m. onthe National Bank of Slovakia�s website and


Slovakia

on the next day in the daily newspaper�Hospodárske noviny�. Since 11 October 2000,the agency TELERATE has been assuring thefixing of interest rates on the money market,so that the ways in which data are publishedwere extended.

The National Bank of Slovakia, which acts asthe agent of the MoF in the primary marketfor government securities, provides thefollowing information on its activities:

� The results of each auction (primary sale)of government bonds or Treasury billsare published immediately afterwards viathe Reuters� �NBSK17� and �NBSK18�pages (government bonds and Treasurybills respectively).

� The results of the auction are usuallyalso published on the same day on theNational Bank of Slovakia�s website(www.nbs.sk), where they are put intothe database of government bonds andTreasury bills issued. The data includeinformation on the type of securities, theInternational Securities IdentificationNumber (ISIN), the maturity, the coupon,the total amount of the issue, the totaland the accepted bids at auction, and theminimum, average and maximum yieldfrom the auction. The total of existingissues is updated daily in the database ofgovernment bonds and is alsodistinguished by colour. The individualissues are also arranged according tomaturity, as well as in the summarytables.

� The data are automatically included inthe SDDS project organised by theInternational Monetary Fund (IMF), forwhich the Statistical Office of the SlovakRepublic (SO SR) is responsible in Slovakia.

� On the day of each auction, the resultsare sent to the media (by e-mail and/orfax) and published on the following day,as well as to domestic and foreignagencies (Bloomberg, Reuters, etc.), andto the BCPB.

� Information illustrating the developmenton the primary and secondary marketsof government securities is released inelectronic format on the National Bankof Slovakia�s website every half-year andcomprises 10-11 pages.

� Papers (reports) on the development ofthe capital and money markets areelaborated on a monthly, six-monthly andannual basis, and are attached to thereports on monetary developments.

The BCPB releases data on the developmentof the equity and bond indices, data on thevolume of trades in individual types ofsecurities, data on the trading amounts ofmajor titles and data on the marketcapitalisation of individual types of securities.These data are published in the daily pressand on the following website: www.bsse.sk.

The KBB releases data on all tradesconcluded on its website (www.kbb.sk), inthe daily press (�Hospodárske noviny�,�Hospodársky denník� and �Rolníckenoviny�) and via the press agencies SITA andATIS (Agrarian and Market Information ofSlovakia). The data are released once a weekand are published in the following form:

� commodity;

� minimum price (in SKK);

� maximum price (in SKK);

� average price (weighted, in SKK);

� amount (in tonnes); and

� total volume (in SKK).

2.5 Users

The main users of financial markets data arethe employees of the National Bank ofSlovakia (in cases where the data arecollected by the National Bank of Slovakia).Given that the financial market data are on


Slovakia

the websites of the relevant institutions andare also published in the daily press, they are

accessible both to professionals and to thegeneral public.


3.1.1 Definitions

The Securities Centre of Slovakia (SCP) wasestablished under Act No. 600/1992 Coll.4on securities, in order to registerdematerialised securities and data related tothose securities. At the end of 2002, it willbe required to apply for a new centralsecurities depository (CSD) licence underAct No. 566/2001 Coll.4 of 9 November2001 on securities and investment servicesand on amendments to certain laws.

Pursuant to the following regulations:

� Act No. 149/2001 Coll.4 supplementingAct No. 566/1992 Coll.4 on the NationalBank of Slovakia, as amended;

� Act No. 566/2001 Coll.4 on securitiesand investment services and onamendments and supplements to certainlaws;

� Decision of the National Bank of SlovakiaNo. 4/1999 of 27 August 1999, whichsets the rules for the operation of theCentral Register maintained by theNational Bank of Slovakia.

The Central Register was set up by law as aregister of the short-term securitiesdenominated in Slovak koruna that are issuedby the MoF and the National Bank of Slovakiawith maturities of up to one year to coverthe state budget deficit and to regulate themoney market.


The data on the dematerialised securitiesobtained from the SCP and the data on

trading in such securities obtained from thestock exchanges are used by the FMA inpreparing its analysis of the capital marketsituation The FMA is legally required tosubmit its analysis to the Slovak Governmentonce a year.

Information on issues and holdings ofsecurities is an important element ofmonetary and financial analysis at theNational Bank of Slovakia. For borrowers,securities issues are an alternative to bankfinancing. Holders of financial assets may viewbank deposits, negotiable instruments issuedby banks and other securities as partialsubstitutes. Over time, any movements infinancing between the banking system andthe securities markets may affect thetransmission mechanism of monetary policy.


By law, only the registration requirementhas been laid down for securities issues. Itapplies to two entities, namely the SCP andthe National Bank of Slovakia�s CentralRegister. The legal framework for statisticalpurposes has not been provided.




At the present, there is no reporting systemin place. There are no legal powers to collectdata on securities issues for statistical purposes.




Slovakia

In 1993, the MoF appointed the SCP to actas the national numbering agency for Slovakiaresponsible for allocating and registering theISIN codes for publicly tradable securities inSlovakia.

The SCP is a member of the internationalAssociation of National Numbering Agencies(ANNA).


The FMA collects data for the purposes ofsupervision and for the preparation of capitalmarket analysis. It currently collects issuerreports on economic performance, which aresubmitted on a biannual basis, with the semi-annual report being submitted within twomonths of the end of the calendar half-year;and the annual report within five months ofthe end of the calendar year. Trusteecompanies disclose data on issued andredeemed units in open-end funds at leastonce a week, and in closed-end funds at leastonce a month.



Data collected by the FMA are recorded asof the last day of the period under review(i.e. as the end-of-period data).


None.

3.3.3 Revisions

None.

3.4 Publications


As the MoF�s agent on the primary marketfor government securities, the National Bankof Slovakia discloses the following information:

� After each auction (primary sale) ofgovernment bonds or Treasury bills, theresults are immediately disclosed via theReuters �NBSK17� and �NBSK18� pages(government bonds and Treasury billsrespectively).

� As a rule, the auction results are alsodisclosed on that day on the NationalBank of Slovakia�s website (www.nbs.sk),where they are included in the databaseof government bonds and Treasury billsissued. The database comprises informationon the security�s form, the ISIN, thematurity, the coupon, the issue volume,total and accepted bids at auction, andthe minimum, average and maximum yieldfrom the auction. In the database ofgovernment bonds, the volume of existingissues, which is also differentiated bycolour, is updated daily. In addition tothe summary tables, individual issues arealso listed according to their maturity.

� These data are automatically included inthe SDDS project organised by the IMF,for which the SO SR is responsible inSlovakia.

� On the day of auction, the results aresent to the media (via e-mail and fax),which publish them on the following day,as well as to domestic and foreignagencies (Bloomberg, Reuters, etc.) andto the BCPB.

� On a six-monthly basis, the report onthe development of the primary andsecondary markets for governmentsecurities is published in electronicformat on the National Bank of Slovakia�swebsite. The report comprises some 10-11 pages.


Slovakia

� Monthly, six-monthly and annual papers(reports) on capital and money marketdevelopments are prepared, and supplementthe reports on monetary developments.

Within the scope of its open market operations,the National Bank of Slovakia carries outprimary auctions of National Bank of Slovakiabills and discloses their results on the day ofauction on the Reuters �NBSK03� page, fromwhich data are downloaded into the Teleratesystem. On that day, after 5 p.m., the resultsare also published on the National Bank ofSlovakia�s website (www.nbs.sk). On the

subsequent working day, the results arepublished in the daily �Hospodárske noviny�.


None

3.5 Users

The FMA collects data for supervisorypurposes, and later uses them in preparationof its capital market analysis.


4.1.1 Definitions

A financial derivative is a contract wherebythe purchaser acquires from the seller a rightto buy (or sell, depending on whether theoption is a call or a put) a specified underlyinginstrument at a strike price on or before aspecified date.

A forward contract is an unconditionalcontract whereby two counterparties agreeto exchange a specified quantity of anunderlying instrument (real or financial) atan agreed price on a specified date.

A futures contract is a forward contract tradedon organised exchanges.

Structured notes5 have not been traded inSlovakia thus far.

A swap contract is a forward contract wherebycounterparties exchange, at prearrangedterms, cash flows based on the referenceprices of the underlying instruments.

The definitions of financial derivatives are inline with those used internationally.


The Treasury Department of the NationalBank of Slovakia (OSDA NBS) monitors theinterbank foreign exchange market every tendays and assesses its development on a monthlybasis. Commercial banks report all foreignexchange transactions carried out against theSlovak koruna, including swaps and forwards,while options are not reported thus far.

Financial derivatives statistics is not used inmonetary policy, because financial derivativesthus far play an only insignificant role infinancial markets.


Only National Bank of Slovakia has the legalpower under the Regulation of the National

4 Financial derivatives statistics4

4 Here, the term “financial derivatives statistics” refers to dataaccruing to the following categories: options, forward contracts,futures, structured notes and swaps.

5 Structured notes are hybrid securities, possessing characteristicsof standard debt instruments and derivative instruments. Ratherthan paying a standard fixed or floating coupon, the interestpayments on these instruments are tailored to a vast array ofpossible indices or rates. They provide investors with anopportunity to take advantage of views not only on the directionof the development of interest rates, but also on the volatility,the range, the shape of the term structure (i. e., long-term ratesversus short term rates) and the direction of the developmentof commodity and equity prices.


Slovakia

Bank of Slovakia No. 14/2002 of 12 December2002 on the presentation by banks and branchoffices of foreign banks of reports to theNational Bank of Slovakia to collect informationon financial derivatives from commercial banks.



The Statistics Department of the NationalBank of Slovakia collects the data directlyfrom all commercial banks. Financialderivatives are traded over-the-counter (OTC).


The Statistics Department of the NationalBank of Slovakia collects data on the type oftransaction, the name of the bank, the nameof the counterparty, the volume of transactions,the date of the transaction, the value date ofthe transaction, the maturity value (forswaps), the spot rate and, for swaps andforwards, also the forward rate. The dataare delivered in electronic format via theSTATUS system. The collection methodologyis set by the Statistics Department of theNational Bank of Slovakia and comprises asystem of cross-reports and interbank reports.


Banks report all derivative (forward and swap)transactions carried out, irrespective of theirmaturity. The data is reported for every ten-day period and within five days after thereference period.


4.3.1 Definitions

The data are provided as a ten-day total of theindividual transactions, and not as average data.


None

4.3.3 Revisions

None

4.4 Publications


The data are included in the Monetary Surveyfor the related month, normally with a timelag of one month, in the form of text andnumeral data on changes compared with thepreceding month, without charts. The dataare also available on the National Bank ofSlovakia�s website (www.nbs.sk).


The National Bank of Slovakia also publishesstatistical data on financial derivatives. Thedata cover transactions between Slovak banks(excluding foreign participations), transactionsbetween Slovak and foreign banks, foreignexchange market transactions in Slovakia,excluding those of the National Bank of Slovakia,the type of transaction (spot, forward, swap),the total volume of transactions in US dollarsand the number of transactions. These datacan be found on the Reuters �NBSK14�,�NBSK19" and �NBSK20� pages and are providedin electronic format on a monthly basis.

4.5 Users

The OSDA NBS and commercial banks usethe data for their own needs.


Slovakia


5.1.1 Definitions

According to Section 2 of Article 42 of ActNo. 483/2001 Coll.7 on banks and thecorresponding amendments to some otheracts, �banks and branch offices of foreignbanks shall be obliged to produce and presentto the National Bank of Slovakia returns,notifications and other reports in line withthe specified method and within specifieddeadlines; the content, form, arrangement,deadlines, method, and place of theirpresentation shall be stipulated by theNational Bank of Slovakia in a directivepublished by the National Bank of Slovakiaand promulgated in the Collection of Laws.�

In 2003, the National Bank of Slovakiapublished the Regulation of the National Bankof Slovakia No. 14/2002 of 12 December2002 on the presentation by banks andbranch offices of foreign banks of reports tothe National Bank of Slovakia. This regulationgoverns the reports on interest rates thatbanks and branch offices of foreign bankssubmit to the National Bank of Slovakia.Interest rate statistics cover those interestrates that are applied by resident banks andbranch offices of foreign banks to nationalcurrency deposits of and loans to householdsand non-financial corporations resident inSlovakia. All banks and branch offices offoreign banks resident in Slovakia areincluded in the reporting population.


The main reason for the collection of dataon retail interest rates is related to thetransmission mechanism of monetary policy.Data on interest rates are needed to monitorthe process by which changes in central bankinterest rates influence the economy. Theyalso play important role in financial marketanalysis, identifying lending costs and demand

for money. They throw light upon thechanging structure of financial system, andon sectoral financial positions and pressuresto which these may be subject.


The reports submitted to the National Bankof Slovakia by banks and branch offices offoreign banks under the provisions ofRegulation No. 14/2002 are obligatory.



All banks and branch offices of foreign bankspresent such reports. The branch offices ofSlovak banks are not subject to statisticalreporting requirement; the respective headoffices submit the reports.

All banks and branch offices of foreign banksare obliged to comply with the statisticalreporting requirements of the National Bankof Slovakia.

In view of the fact that all banks submitreports, the reporting coverage is 100%.


Pursuant to Regulation No. 14/2002, theNational Bank of Slovakia collects the samedata from all banks. On 31 December 2002,there were 22 commercial banks in Slovakia,namely 17 universal commercial banks (twoof which were subject to insolvencyproceedings), three housing savings bank andtwo branch offices of foreign banks.

5 Monetary financial interest rate statistics6

6 The term “MFI interest rates” refers to “retail interest rates”(see Regulation ECB/2001/18).



Slovakia

The census method is used.

Data are collected on interest rates forgranted and drawn credits and for deposits.The following reports are required:

V/NBS/7-12monthly report on credits and the level ofaverage interest rates, broken down by typeof credit (from 1993);

V/NBS/9-12monthly report on credit drawings and thelevel of average interest rates, Broken downby type of credit (from 1993);

V/NBS/91-12monthly report on credit drawings in thecurrent month and the level of averageinterest rates, broken down by maturity(from 2002);

V/NBS/11-12monthly report on deposits and the level ofaverage interest rates, broken down bymaturity (from 1993); and

M/NBS/11-12monthly report on new deposits accepted inthe current month and the level of averageinterest rates, broken down by maturity(from 2003).

The data is collected electronically via theSTATUS system, which is used for collectingand processing statistical reports.

The collection methodology is set by theStatistics Department of the National Bankof Slovakia and comprises a system of internalreports and cross-reports. The accountingrules are regulated by the MoF. The MoFupdates the chart of accounts as required.


The interest rates for credits are collectedand are broken down by:

� amount (the total amount of credits,credits drawn in a specific month, andcredits granted in the current year only);

� type of credit (overdraft, bill of exchange,operating, developing, consumer creditfor households, construction, mortgage,etc.);

� sector (non-financial corporations: public,private, under foreign control; generalgovernment (excluding the centralgovernment), households, non-profitinstitutions and others); and

� maturity (short term, medium term, longterm, up to seven days, up to one month,up to three months, up to six months,up to nine months, up to one year, up to18 months, up to two years, up to threeyears, up to four years, up to five years,and above five years).

The interest rates on deposits (Slovak korunaonly) are collected and broken down by:

� sector (non-financial corporations: public,private, under foreign control; generalgovernment (excluding the centralgovernment), households, non-profitinstitutions and others);

� maturity (demand; and time: short term,medium term, long term, up to sevendays, up to one month, up to threemonths, up to six months, up to ninemonths, up to one year, up to 18 months,up to two years, up to four years, up tofive years, and above five years)

The reports on interest rates are submittedmonthly on the basis of stocks as at the endof a given month, with a submission deadlineof the 15th calendar day of the subsequentmonth.


Slovakia



The volumes of credits or deposits are stockvariables as at the end of the referenceperiod, and the interest rates are weightedarithmetic mean rates.


None.

5.4 Publications


Monthly data in electronic format areavailable to internal users in the STATUSsystem up to 25 calendar days after the endof the reference period. Monthly data areavailable to the public on the National Bankof Slovakia�s website (www.nbs.sk) at the endof the month after the end of the referenceperiod.


Data on interest rates are released in thefollowing publications:

� Monetary Survey: monthly - publishedafter approval by the Board of theNational Bank of Slovakia at the end ofthe month following the referenceperiod, in hard copy (in Slovak only) andin electronic format (in both Slovak andEnglish) on the National Bank ofSlovakia�s website (www.nbs.sk);

� Annual Report: annually - published afterconsideration by the National Board ofSlovakia, usually up to six months afterthe end of the reference period, in hardcopy and in electronic format (in bothSlovak and English) on the National Bankof Slovakia�s website (www.nbs.sk).

5.5 Users

The main users of the interest rates data arethe employees of the National Bank ofSlovakia. In view of the fact that the interestrate data are available on the National Bankof Slovakia�s website, they are accessible bothto professionals and to the general public.


Statistics Department - Section of Statisticsfor International InstitutionsTel: +421-2-57872690

+421-2-57872691Fax: +421-2-57871166E-mail: [email protected]

[email protected]

6 Contacts at the National Bank of Slovakia


Slovakia

Slovenia


Slovenia


ATVP Securities Market Agency - Agencija za trg vrednostnih papirjev - the governmentagency for the supervision of securities markets in Slovenia

BTS the electronic trading system at the Ljubljana Stock Exchange - borzni trgovalnisistem

CFI Classification of Financial Instruments

� or EUR euro

GDP gross domestic product

ISIN International Security Identification Number

KDD Central Securities Clearing Corporation - Centralna klirin�ko depotna družbad.d. - a joint-stock company providing clearing and registry services in relationto dematerialised securities traded on the national securities market

LJSE Ljubljana Stock Exchange - Ljubljanska borza vrednostnih papirjev - the organisedpart of the secondary securities market


NAV net asset value


SURS Statistical Office of the Republic of Slovenia - Statistični urad Republike Slovenije

TOM Tolar Indexation Clause - temeljna obrestna mera - an annual rate used for theindexation of financial liabilities


Slovenia


1.1.1 Introduction

The Slovenian financial sector is divided intomonetary financial institutions (MFIs) andnon-monetary financial institutions (non-MFIs). Monetary financial institutions includethe Bank of Slovenia, commercial banks,savings banks and savings and loanundertakings. At the end of 2001, there were21 commercial banks in Slovenia (includingfour subsidiaries of foreign banks and onebranch of a foreign bank), three savings banksand 45 savings and loan undertakings.

Non-MFIs are further divided into otherfinancial intermediaries (OFIs), financialauxiliaries and insurance corporations andpension funds. At the end of 2001, therewere 15 insurance companies (including tenclassic insurance companies, two re-insurancecompanies and three specialised publicinstitutions). The pension reform in Sloveniastarted at the beginning of 2000. At the endof 2001, among financial institutions dealingwith pension schemes, there were sevenmutual pension funds and six pensioncompanies. The most significant financialauxiliaries are the agency financial institutions(or financial agents). At the end of 2001, 11banks and 20 stockbroking companies wereengaged in this business segment. In Slovenia,the OFI sector includes mutual funds andauthorised investment companies. At the endof 2001, there were 35 authorisedinvestment companies and 18 mutual funds.

1.1.2 Definitions

Authorised investment companies areregarded as a special form of closed-endinvestment company established for thepurpose of collecting vouchers fromSlovenian citizens and exchanging them forshares in privatised companies in accordancewith the Act on Ownership Transformationof Companies1. The problem of the

�privatisation hole� will be solved with thesale of some state-owned companies.Authorised investment companies have to beconverted into regular companies (holdings)or investment funds by the end of 2003.Authorised investment companies aresupervised by the Securities Market Agency(ATVP)2 under the Act on Investment Fundsand Fund Management Companies3.

Mutual funds pool money from investors.Fund managers then invest the money indifferent types of securities. This offersinvestors the advantage of diversification andprofessional management. In Slovenia thereare mutual funds with more aggressive andmutual funds with more conservative investmentpolicies. Mutual funds are supervised by theATVP under the Act on Investment Fundsand Fund Management Companies.

Fund management companies are the onlyentities authorised to establish and runmutual funds or authorised investmentcompanies.

As well as investment funds and thecompanies mentioned above, the OFI sectoralso includes companies concerned withfinancial intermediation in the area ofconsumer loans, credit cards, mortgage loans,financial leasing, securitisation and specialisedfinancial companies (such as venture capitalcompanies). A statistical analysis of thedescribed financial intermediaries is not yetavailable, except in the area of financialleasing where the data is reported by theAssociation of Leasing Companies of Slovenia.


1 Official Gazette of the Republic of Slovenia (Official Gazette),Nos. 55/92, 7/93, 31/93, 32/94 and 40/94.

2 The ATVP supervises the securities markets and carries out thetasks and responsibilities set out in the Securities Market Act,the Act on Investment Funds and Fund Management Companies,the Takeovers Act and the Dematerialised Securities Act. TheATVP carries out its duties and responsibilities in order toensure that the provisions of the various acts are complied with,to create the conditions necessary for the efficient operation ofthe securities markets and to inspire investor confidence inthose markets.

3 Official Gazette, Nos. 6/94, 25/97 and 32/97 - amended inNos. 10/98 and 26/99.


Slovenia


The collected data on mutual funds andauthorised investment companies are usedfor supervisory purposes by the ATVP. TheBank of Slovenia has access to the data forstatistical and analytical purposes.


The Act on Investment Funds and FundManagement Companies lays down amandatory reporting scheme for mutualfunds and authorised investment companies.According to the Rules on Co-operationAmong Supervisory Institutions4, the Bank ofSlovenia, the Ministry of Finance and theInsurance Supervision Agency have access tothe data for statistical and analytical purposes.



The management companies of 35 authorisedinvestment companies and 18 mutual fundsreport to the ATVP on a regular basis. TheBank of Slovenia receives data on authorisedinvestment companies and mutual funds fromthe ATVP according to its analytical needs(quarterly).

At the end of 2001, authorised investmentcompanies accounted for 57% and mutualfunds for 2% of the total assets held by OFIs.


Types of data collected:

Balance sheet items

� Reporting population: the managementcompanies of authorised investmentcompanies and mutual funds.

� Medium of reporting: e-mail (from theATVP to the Bank of Slovenia)

� Available breakdowns:

� short-term securities,

� long-term securities,

� bonds (traded on organised andunorganised markets), and

� shares (traded on organised andunorganised markets).

Breakdowns along geographical and sectorallines do not yet exist.

Selected balance sheet items on thestructure of investments (assets)

� Reporting population: the managementcompanies of authorised investmentcompanies and mutual funds.

� Medium of reporting: e-mail (from theATVP to the Bank of Slovenia).

Number of investors

� Reporting population: the managementcompanies of mutual funds.


Net asset value

� Reporting population: the managementcompanies of mutual funds.


Information on transformed authorisedinvestment companies

� Reporting population: the managementcompanies of the authorised investmentcompanies.

4 Official Gazette, Nos. 55/99 and 97/00.


Slovenia



Balance sheet items

The Bank of Slovenia has data on the balancesheets items of authorised investment companiesand mutual funds dating back to 1997.

Annual reporting.

Selected balance sheet items on thestructure of investments (assets)

The Bank of Slovenia has data on selectedbalance sheet items dating back to 1995.

The ATVP sends data on the structure ofassets of authorised investment companiesand mutual funds to the Bank of Slovenia ona quarterly basis, at the request of the Bankof Slovenia. The management companies ofauthorised investment companies and mutualfunds are obliged to send data on thestructure of their assets to the ATVP on amonthly basis, within eight days of the end ofthe reporting month.

Number of investors

The Bank of Slovenia has data on numbers ofinvestors dating back to 2000.

The ATVP sends data on the number ofinvestors to the Bank of Slovenia on aquarterly basis, at the request of the Bank ofSlovenia. The management companies ofmutual funds are obliged to report thenumber of their investors to the ATVP on amonthly basis, within eight days of the end ofthe reporting month.

Net asset value

The Bank of Slovenia has data on net assetvalues (NAVs) dating back to the beginningof 1997.

The ATVP sends data on NAVs to the Bankof Slovenia on a quarterly basis, at therequest of the Bank of Slovenia. Themanagement companies of mutual funds areobliged to report their NAVs to the ATVPdaily.

Information on transformed authorisedinvestment companies

The Bank of Slovenia has data on transformedauthorised investment companies dating backto 2000.

The ATVP sends the Bank of Slovenia a listof transformed authorised investmentcompanies at the request of the Bank ofSlovenia. In order to become �transformed�,authorised investment companies have to getpermission from the ATVP.



Breaks in series are not relevant.

1.3.2 Revisions

The Bank of Slovenia only uses revised datafrom the ATVP.

1.4 Publications

Data on OFIs are published in the followingpublications:

Financial Markets:

� Source: Bank of Slovenia.

� Frequency of publication: quarterly.

� Medium of publication: in hard copy andon the Bank of Slovenia�s website(www.bsi.si) (only in Slovene).


Slovenia

Bulletin on Financial Markets in Slovenia:

� Source: Ministry of Finance.


� Medium of publication: in hard copy(only in Slovene).

1.5 Users

Internal users within the Bank of Sloveniaand other financial institutions which use thedata for financial analysis.


2.1.1 Definitions

Debt markets:

Money market

The Foreign Exchange Act5 defines securitiestraded on the money market as short-termsecurities with a maturity of less than oneyear, such as Treasury bills, bank bills,certificates of deposit, bankers� acceptancesand other similar instruments.

The most important participants in themoney market are banks, the Treasury, thepension fund and the health security fund.Market transactions are usually based onbilateral agreements in form of deposits orloans rather than on securities repurchaseagreements. Over the last two years,currency swaps have also become increasinglycommon among banks.

The interbank market is the most significantpart of the money market. It has an adequatelevel of activity and is mainly devoted to themanagement of the liquidity needs of banks.Banks trade their liquidity positions bilaterallyduring and at the end of the business day.The most common transactions areovernight, call and very short-term loanswithout collateral.6

The money market in a broader sense alsoincludes the market for short-term securities.In this market Treasury bills are the onlytradable securities (until 2000 there were

also Bank of Slovenia bills). The governmentstarted to issue Treasury bills in May 1998.It began with three-month bills and lateradded six-month, twelve-month and one-month bills. Treasury bills are discounted,dematerialised securities sold at auctionsthrough primary dealers. Three-month, six-month and twelve-month Treasury bills arelisted on the Ljubljana Stock Exchange (LJSE).The Bank of Slovenia and the Ministry ofFinance have become more active insupporting the Treasury bills market. Marketmakers were introduced and their quotationsare publicly presented.

Capital market (excluding equities)

The Foreign Exchange Act defines securitiestraded on the capital market as shares, bondsand other securities issued in series andtraded on the organised or unorganisedsecurities markets.

The capital market (excluding equities) is themarket for trading in debt securities withoriginal maturities of one year or more.

The Securities Market Act7 defines debtsecurities as securities that obligate the issuerto pay the holder the principal and anyinterest or other returns due.


5 Official Gazette, No. 23/99.6 At the beginning of 2002, banks started to quote interbank

deposit rates with different maturities (overnight, one week, twoweeks, two months, three months, six months and nine months).These are displayed on the Bank Association of Slovenia’swebsite (www.zbs-giz.si). In future, these rates may be used asa reference for determining other rates.

7 Official Gazette, No. 56/99.


Slovenia

On the capital market, the main issuers ofdebt securities, apart from governmentissues, are banks, which raise long-term fundsfor lending to companies.

There were 76 bonds listed on the LJSE atend of December 2001. The marketcapitalisation of bonds reached �1.6 billion,or 8% of Slovenia�s gross domestic product(GDP). The value of bond transactions onthe LJSE in 2001 amounted to �0.2 billion(1% of GDP). Bonds accounted for 15% oftotal turnover on the LJSE.

Asset markets:

Equity market

In the area of equity securities, rapiddevelopment has led to a number ofproblems. Most shares stem from theprivatisation process. The majority of listedcompanies have low profitability and shareson the secondary market are trading formany companies below book values.

The main indices are:

� the Slovenian Stock Exchange Index - SBI20;

� the non-weighted Slovenian StockExchange Index - SBI 20 NT;

� the Free Market Index - IPT; and

� the Index of Authorised Investment FundShares - PIX.

There are also six sector indices, whose mainpurpose is to provide basic information aboutshare price movements within individualindustrial sectors. These are:

� FAR (pharmaceuticals);

� HRP (food and beverages);

� KEM (chemicals);

� NAF (oil and gas);

� TRS (transport); and

� TRG (trade).

The principal share index of the LJSE is theSBI 20. Its main purpose is to provideinformation about general share pricemovements on the LJSE. It is compiled fromthe prices of the 20 leading ordinary sharesquoted on the LJSE.

There were 194 shares listed on the LJSE atthe end of December 2001 (including 38shares of authorised investment companies).The market capitalisation of shares reached�4.6 billion (22% of GDP). The value of sharetransactions on the LJSE in 2001 amountedto �1.4 billion (6% of GDP). Shares accountedfor 84% of total turnover on the LJSE. Thetop five shares accounted for 26% of themarket capitalisation of shares and 32% ofturnover in shares.


In accordance with the Foreign Exchange Act,the Bank of Slovenia supervises the activitiesof persons authorised to conduct foreignexchange operations, including that part ofthe activities of authorised banks and savingsbanks which concerns foreign exchangeoperations.

The foreign exchange market in Slovenia iscomposed of a spot market and a forwardmarket and includes transactions betweenbanks and banks, between banks andenterprises, between banks and non-residents and between banks and households.In 2001, turnover on the foreign exchangemarket amounted to �25.9 billion (�18.4billion in spot transactions, �3.3 billion inforward transactions and �4.2 billion inexchange bureaux transactions).

The exchange rate of the Slovenian tolar onthe foreign exchange market is determinedfreely by the relationship between supply anddemand. The Bank of Slovenia disseminates


Slovenia

daily data on the spot exchange rates of theSlovenian tolar against 15 foreign currencies,including the world�s leading currencies andthe currencies of Slovenia�s main tradingpartners. The official exchange rates inrelation to the other currencies arecalculated and published once a month.

Commodity market

There is no commodity exchange in Sloveniaat present.


Financial market statistics are used by theBank of Slovenia, the ATVP, the InsuranceSupervision Agency, the Ministry of Financeand other entities for analytical andsupervisory purposes.

Financial market statistics provide a tool foranalysing the financial stability of the country,for analysing the liquidity situation of banksand the distribution of excess reserves, orfor informing the general public at home andabroad about financial and macroeconomicdevelopments in the Republic of Slovenia.

Financial market statistics have an indirectimpact on the monetary policy of the Bankof Slovenia.


The collection of statistics and the recording,compilation, processing, posting and deliveryof data by banks are governed by thefollowing laws and acts, which can be foundon the Bank of Slovenia�s website(www.bsi.si):

� The Law on the Bank of Slovenia8 is thelaw which governs the central bank andincludes articles explicitly authorising thecentral bank to collect and process dataon monetary and credit activities.

� The Law on Banking9 lays down theconditions for the establishment,operation and supervision of banks andsavings banks. It includes provisions onregular monthly reporting by banks tothe Bank of Slovenia.

� The Foreign Exchange Act10 containsgeneral provisions governing reporting tothe Bank of Slovenia and reporting onoperations in securities.

� The Securities Market Act11 and theDematerialised Securities Act12 providethe legal basis for the collection of dataon securities statistics by the ATVP andthe Central Securities ClearingCorporation (KDD).

In accordance to the Foreign Exchange Act,the Bank of Slovenia collects data on theforeign exchange market from banks andsavings banks which conduct foreign exchangeoperations and from other personsauthorised to conduct foreign exchangeoperations.



There are various types of reporting agentsfor financial market statistics.

� Data on interbank interest rates and onthe money market in general areprovided by banks.

� Data on securities (securities market) arebased on information from:

� the KDD, which offers issuing,transfer, payment and record-keepingservices. Most existing securities and

8 Official Gazette, No. 58/02.9 Official Gazette, Nos. 7/99, 102/00 and 59/01.10 Official Gazette, No. 23/99.11 Official Gazette, No. 56/99.12 Official Gazette, No. 23/99.


Slovenia

all of the privatisation shares arealready in a book-entry form;

� the LJSE, which represents theorganised part of the secondarysecurities market;

� the ATVP; and

� the Ministry of finance.

� Data on the foreign exchange marketare based on information from banks andsavings banks which conduct foreignexchange operations and from otherpersons authorised to conduct foreignexchange operations.


Data collected on interest rate statisticsinclude:

� average declared commercial bankinterest rates;

� average effective commercial bankinterest rates;

� interbank money market rates; and

� Bank of Slovenia interest rates.

The data on interbank transactions reportby banks to the Bank of Slovenia includevolumes and interest rates. In the past, banksreported on transactions with maturities ofup to 30 days, but they have been obliged toreport all transactions since March 2002.

Data collected on securities statistics includedata on:

� the primary securities market;

� the LJSE (turnover, capitalisation);

� the unregulated securities market;

� foreign portfolio investments (purchasesand sales of securities by foreigninvestors);

� the register of securities and issuers;

� information on investors (broken downby sector and by country); and

� portfolio investments abroad (purchasesand sales by Slovenian investors abroad).

Data on the foreign exchange market whichare reported to the Bank of Slovenia includeturnover and exchange rates for transactions(spot and forward) between:

� banks and enterprises;

� banks and banks;

� banks and non-residents; and

� banks and households.

The Foreign Exchange Act provides the legalbasis for the compilation and disseminationof statistics on exchange rates by the Bankof Slovenia. The official exchange rate of theSlovenian tolar against the euro is calculatedon the basis of the exchange rates reportedby the commercial banks. Data on forwardexchange rates are not yet disseminated.

The media used for data collection areelectronic (e-mail), hard copy and the internet.

The accounting rules are in line with nationalaccounting standards, which correspond tointernational accounting standards.


Interest rate statistics:

� monthly data on declared commercialbank interest rates;


Slovenia

� quarterly data on effective commercialbank interest rates;

� daily data on interbank money marketrates; and

� daily and monthly data on Bank ofSlovenia interest rates.

Securities statistics:

� monthly data on the primary securitiesmarket;

� daily and monthly data on the LJSE;

� monthly data on turnover on theunregulated securities market;

� daily and monthly data on foreignportfolio investments;

� monthly data on the register of securitiesand issuers (Book of shareholders);

� quarterly data on securities portfolioanalysis by sector; and

� monthly data on portfolio investmentsabroad.

Foreign exchange market:

� official exchange rates of the Sloveniantolar against the major currencies, whichare set at 2 p.m. on each business dayand enter into effect on the followingbusiness day;

� information on spot transaction turnoveron the foreign exchange market, whichhas been available for transactionsbetween banks and banks and betweenbanks and enterprises since 1992, andfor transactions between banks and non-residents and between banks andhouseholds since 2000;

� information on forward transactionturnover on the foreign exchange

markets, which has been available since2000; and

� daily data for individual transactions onthe foreign exchange market.



Interest rate statistics:

� annual averages of Bank of Sloveniainterest rates are calculated as simplearithmetic averages of monthly data;

� annual averages of interbank interestrates are calculated as simple arithmeticaverages of monthly data;

� monthly average interest rates ofcommercial banks are calculated asweighted arithmetic averages of theminimum and maximum interest rates;

� the spread is the difference between theminimum and maximum interest rates.

Securities statistics:

� data relate primarily to transactions madein a period and positions at the end ofthat period;

� data are broken down by type of securityand by sector and country of the issuerand the holder;

� nominal values, market values and bookvalues are used to estimate amounts ofsecurities outstanding .

LJSE:

� turnover by market segment or by typeof security is measured by single counting(i.e. each transaction is counted only once);


Slovenia

� market capitalisation by market segmentor by type of security is calculated as thesum of the market capitalisation ofindividual securities;

� the market capitalisation of an individualsecurity is calculated as the product ofthe number of listed securities and themarket price at the end of the period;

� the turnover ratio is calculated bydividing the turnover in a period by themarket capitalisation at the end of period;

� short-term securities are not included incalculations of the market capitalisation.

Bank of Slovenia exchange rates:

� the official exchange rate of the Sloveniantolar against the euro is calculated dailyby the Bank of Slovenia on the basis of amoving average of the daily market rateson the foreign exchange market over thepreceding 60 days. The other officialexchange rates are then calculated onthe basis of the closing rates on theFrankfurt foreign exchange market;

� monthly averages are calculated asarithmetic averages of the daily rates;

� annual rates are calculated as arithmeticaverages of the monthly rates.

Foreign exchange market:

� daily rates are averages calculated fromall transactions (between banks andenterprises, between banks and banks,between banks and non-residents, betweenbanks and households), weighted by thesize of transaction;

� monthly rates are averages calculatedfrom daily rates on working days,weighted by turnover;

� annual rates are calculated as arithmeticaverages of the monthly rates.


All changes are marked and explained innotes. The explanation for the data series isprovided in the Monthly Bulletin of the Bankof Slovenia.

2.3.3 Revisions

The corrected data are marked when theyare first published in the Monthly Bulletinand the change is accompanied by a commentif its nature requires explanation.

2.4 Publications


Monthly Bulletin:


� Type of data: interest rates (Bank ofSlovenia interest rates, interbank moneymarket rates and indexation clauses,interest rates for Bank of Slovenia bills,average interest rates for commercialbanks); data from the LJSE (turnover bymarket segment and type of security,market capitalisation and turnover ratio,SBI 20 and bond index); and exchangerates (selected Bank of Slovenia exchangerates, average rates, turnover and foreignexchange market rates).

� Frequency of publication: monthly, in thesecond half of the month following themonth under review.

� Medium of publication: in hard copy (inEnglish and Slovene) and on the Bank ofSlovenia�s website (www.bsi.si) (in English).


Financial Markets:



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� Type of data: securities markets: primarysecurities market (data on the numberof securities issues and members of theKDD) and unregulated securities market(data on the number of securities issuersand members of the LSE, foreignportfolio investment, analysis of tradingwith shares on the LSE, securitiesportfolio analysis by sectors, portfolioinvestment abroad); and interest rates(Bank of Slovenia interest rates,interbank money market rates).



2.5 Users

The main users of financial market data areinternal users in the Bank of Slovenia (foranalytical purposes), international financialinstitutions, other financial institutions andthe general public.


3.1.1 Definitions

The Slovenian securities market is governedby the following pieces of legislation: theSecurities Market Act, the DematerialisedSecurities Act and the Foreign Exchange Act.

The ATVP was established on 13 March 1994.The ATVP has powers to carry out tasksrelated to trading in securities as laid downby the Securities Market Act, the Act onInvestment Funds and Fund ManagementCompanies, the Takeovers Act13 and theDematerialised Securities Act. Theresponsibilities of the ATVP include issuingoperating licences to financial institutions (tothe LJSE, the KDD, brokerage firms, fundmanagement companies, investment fundsetc.); approving and overseeing publicofferings on the primary market; monitoringthe activities of authorised participants inthe secondary market; monitoring theactivities of the LJSE14 and the KDD inrelation to insider trading; issuing regulations,which provide the legal basis for theregulation, control and development of thesecurities markets; developing and maintainingpublic registers; and processing other datarelated to the securities markets. The ATVPkeeps a register of authorisations granted

for the public offering of and organisedtrading in securities.

The KDD was founded in 1994. It offersservices related to the issue and transfer ofsecurities, payments and record keeping.Most existing securities and all privatisationshares are already in a dematerialised form.The KDD�s system is compatible with BTS,the electronic trading system of the LJSE.

The KDD provides automatic clearing andsettlement of transactions on the LJSE(payments and transfers of securities);settlement of all off-market transactions(transfers of securities); registration ofdematerialised securities; allocation of theInternational Security Identification Number(ISIN); securities accounts for legal owners;a central database for all dematerialised


13 Official Gazette, No. 47/97.14 The LJSE is the organised part of the secondary securities

market. Securities may be traded in the official market segmentor in the free market segment. Shares and bonds are traded inboth market segments, while shares in authorised investmentcompanies and short-term securities are traded in the freemarket segment only. Trading in each market segment isconducted only through the BTS.270 securities (194 shares and 76 bonds) issued by 220issuers were listed on the LJSE at end of December 2001. Thetotal market capitalisation of securities amounted to 6.2billion (30% of GDP). The total value of transactions on the LJSEamounted to 1.6 billion (8% of GDP) in 2001. The highestproportion of total turnover was accounted for by shares (68%),followed by shares in authorised investment companies (16%)and bonds (15%).


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securities; central depository services;custody services; and services in relation tocorporate action.

According to the Securities Market Act, theclearing house and depository must be apublic limited company which has obtainedauthorisation from the ATVP to provide theservices of a clearing house and depository.The clearing house and depository may onlyprovide (i) services involving the calculating,balancing and ensuring of the meeting ofobligations arising from securities transactionsmade on the organised securities market; (ii)services involving the keeping of the centralregister of dematerialised securities; and (iii)other services with regard to securitiestransactions, the meeting of obligations andthe exercise of rights arising from securities.

The Dematerialised Securities Act governsthe issuing and transferring of dematerialisedsecurities, the replacing of existing physicalsecurities with dematerialised securities, theconditions for and restrictions on access toinformation about holders of dematerialisedsecurities, and the rules for keeping a centralregister of dematerialised securities. Adematerialised security is a computer entrywhich represents an undertaking by theissuer of a security registered in the centralregister of dematerialised securities to fulfilall liabilities under the security to the personwho is registered in the central register asthe legal holder of the security. Adematerialised security may be a registeredsecurity or a bearer security. Dematerialisedsecurities must be issued by banks, insurancecompanies, brokerage firms, fundmanagement companies, issuers of serialsecurities, the first sale of which was carriedout by public offering, or companies derivedfrom privatisation with more than 50shareholders. Issuers of other serialsecurities may issue dematerialised securitiesor replace existing physical securities withdematerialised securities.

According to the Securities Market Act,securities are shares, bonds and other serial

securities. An initial offering of securities isthe offering of securities by the issuer at thetime the securities are issued. All otherofferings of securities are secondaryofferings. A public offering of securities is apublished invitation addressed to the generalpublic to subscribe for securities in an initialoffering or to buy securities in a secondaryoffering. An initial public offering of securitiesis an issuer�s own public offering of securities.A secondary public offering of securities is aholder�s public offering of securities or anoffering of securities on the organisedsecurities market.

An initial offering of securities may only becarried out on the basis of a public offering,unless the issuer can prove that the issue isintended for previously-known, well-informed investors, or unless the issuer ofthe securities is either the Republic ofSlovenia or the Bank of Slovenia. In the caseof a non-public offering, the issuer is onlyobliged to notify the ATVP. Securities mayonly be traded on organised markets if theissuer has successfully carried out an initialpublic offering of securities or obtainedauthorisation for organised trading from theATVP. These conditions for organised tradingdo not apply to securities issued by theRepublic of Slovenia or by the Bank ofSlovenia.

According to the Foreign Exchange Act,operations in securities are operations insecurities traded on the capital and moneymarkets and operations in units of mutualfunds. Operations in securities include:

(i) the sale, issue and introduction ofSlovenian securities abroad;

(ii) the sale, issue and introduction of foreignsecurities in the Republic of Slovenia;

(iii) the acquisition by residents of securitiesabroad; and

(iv) the acquisition by non-residents ofsecurities in the Republic of Slovenia.


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The introduction of securities means thebeginning of trading in foreign securities inthe Republic of Slovenia or in Sloveniansecurities abroad.

Non-residents may only buy or sell securitiesin the Republic of Slovenia through anauthorised participant in the securitiesmarket. Since January 2002, non-residentshave been able to buy or sell securities onthe capital and money markets without anyrestrictions. The Bank of Slovenia mayprescribe the conditions and methods foroperations in securities by non-residents.Foreign debt securities may only be issued inthe Republic of Slovenia after permission hasbeen obtained from the Ministry of Finance.

Investments by Slovenian residents insecurities abroad are free of any restrictions.Until September 1999, only banks wereallowed to buy securities abroad. Inaccordance with the Foreign Exchange Act,residents may only buy and sell securitiesissued abroad through an authorisedparticipant in the Slovenian securities market.Slovenian residents investing in securitiesabroad are obliged to deposit a writtenstatement with the authorised participant inthe securities market confirming that theyare acquainted with all conditions of such apurchase. Authorised participants in thesecurities market, insurance companies andbanks are allowed directly to purchasesecurities abroad. Slovenian residents otherthan banks must, subject to the priorapproval of the Ministry of Finance, obtainthe permission of the ATVP to introduceequity securities abroad.


Securities issues statistics are important tothe Bank of Slovenia because of itsresponsibility for financial stability. Purchasesand sales of securities on primary orsecondary markets by non-residents resultin cross-border capital movements, which areof significance for the monetary and foreign

exchange policy of the Bank of Slovenia. TheBank of Slovenia is also active on thesecurities market as an issuer of short-termdebt securities (Bank of Slovenia bills), so ittakes an interest in issues of debt securities,particularly in the volume and yield of suchissues.

Securities issues statistics are also importantfor the Ministry of Finance, which is theTreasury of the Republic of Slovenia. As oneof the most important issuers of debtsecurities on the domestic securities market,the Ministry of Finance monitors volumesand prices achieved for issues of debtsecurities from other issuers. Thisinformation is needed to definecharacteristics of their debt securities and tomake decisions on issuing debt securities onthe domestic securities market (bonds andTreasury bills) or on foreign securitiesmarkets (eurobonds).

Data on securities issues and on securitiesregistered with the KDD are also importantfor the LJSE for planning secondary marketdevelopment.

Other participants in the securities market(issuers of securities; authorised participantsin securities market (banks and brokeragefirms); and institutional investors).


The Securities Market Act, theDematerialised Securities Act, the ForeignExchange Act and regulations provide thelegal basis for the collection of securitiesissues statistics by the ATVP, the KDD, theBank of Slovenia and the Ministry of Finance.

Most of the data related to securities issuesand to amounts of securities outstanding areavailable to the public.


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The ATVP keeps a register of allauthorisations granted to issuers for publicofferings and organised trading. The ATVPalso possesses information on all non-publicofferings of securities.

The KDD is the source of data on amountsof securities outstanding registered in thecentral register of dematerialised securities.

Authorised participants in the securitiesmarkets, insurance companies and banksmust submit reports to the Bank of Sloveniaon all operations by Slovenian residents insecurities abroad and on all operations bynon-residents in securities in the Republic ofSlovenia. Resident issuers of debt securitiesmust report their issues of securities abroad.

The Ministry of Finance publishes informationon its issues of debt securities on thedomestic securities market (bonds andTreasury bills) and abroad (eurobonds).


(a) Dematerialised securities must be issuedby banks, insurance companies,brokerage firms, fund managementcompanies, issuers of serial securities ofwhich the initial sale was carried out bypublic offering and companies derivedfrom privatisation with over 50shareholders. Issuers of other serialsecurities may issue dematerialisedsecurities or substitute existing physicalsecurities with dematerialised securities.

(b) Slovenian residents are active on theinternational financial markets with someissues of securities. In 2001, two GlobalDepository Receipt programmes (issuedby a company and a bank) were closed.At the end of 2001, there were seveneurobonds issued by the Republic ofSlovenia and one issue of commercial

notes issued by a company. The aggregatevalue of eurobonds reached �2.35 billion(about 11% of Slovenia�s GDP).

(c) The numbering of issued securities isentrusted to the KDD, which uses theISIN system for numbering securities andClassification of Financial Instruments(CFI) codes for their types. The ISINnumber of a security is composed of aprefix, a basic number and check digit.The prefix for securities issued in theRepublic of Slovenia is SI. A list of ISINnumbers of Slovenian securities can befound on the KDD�s website (www.kdd.si).

(d) Data relating to issuers and securities areindividual data, while data relating toholders (investors) are mostly aggregateddata (by institutional sector or by country).

(e) There are no commercial data providersin this area of statistics.

(f) The ESA 95 definitions of institutionalsectors are followed.

The ATVP submits annual reports on thestatus of the securities market to theNational Assembly of the Republic ofSlovenia. The report includes data on thepublic offerings of securities, trading onorganised securities markets, the admissionof securities to organised markets, andtrading in securities outside of the organisedsecurities markets. The annual report isavailable to the public in hard copy and onthe ATVP�s website (www.a-tvp.si).

Information on authorisations granted toissuers for public offerings and for organisedtrading is available on the ATVP�s website.Information on non-public offerings ofsecurities (aggregated data) are available inthe annual report only.

The KDD is also a source of data used bythe Bank of Slovenia. The following data areavailable on the KDD�s website or are sentto the Bank of Slovenia by e-mail in textformat:


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� information on KDD members, issuersof securities and individual securities(monthly);

� information on foreign portfolioinvestments (daily);

� information on investors (number ofinvestors and their share in individualsecurities, by sector and by country ofresidence of investor) (monthly); and

� information needed for preparing abreakdown of securities portfolios bysector of issuer and by sector of investor(quarterly).

At the end of December 2001, the KDD had1,033 securities, including 915 shares and118 bonds, issued by 885 issuers on its books.The market value of shares registered withthe KDD at the end of December 2001amounted to �13.4 billion (64.8% of GDP),while the market value of bonds was �2.6billion (12.7% of GDP).

Non-financial corporations are the mostimportant issuers of shares (78% of totalshare value), followed by banks (15%) andOFIs (6%). The largest shareholder categoryis the Slovenian Government (26%), followedby households (20%), non-financialcorporations (20%), OFIs (19%), foreigninvestors (10%) and banks (4%).

The largest issuer of bonds is the SlovenianGovernment (77% of total bond value),followed by banks (13%) and non-financialcorporations (9%). The largest category ofbond holders is banks (47%), followed byinsurance companies (20%), households(14%), the government (7%), non-financialcorporations (6%), OFIs (4%) and foreigninvestors (2%).

The KDD reports to the ATVP on newlyissued securities and overall turnover inindividual securities as well as on other factsand circumstances relevant to the operationof the organised securities market.

Authorised participants in the securitiesmarkets, insurance companies and banksmust submit reports to the Bank of Sloveniaon all operations by Slovenian residents insecurities abroad and all operations by non-residents in securities in the Republic ofSlovenia. Resident issuers of debt securitiesmust report their issues of securities abroad.The Bank of Slovenia lays down what is to bereported (see annex), the method (fixed textformat, encryption, e-mail) and deadlines(monthly, 20 days after the end of themonth).

The Bank of Slovenia prepares reports oninvestment flows and positions in securitiesby sector and country of issuer and investor.

The contents of the monthly reports to theBank of Slovenia include:

� general information:

� month and year,

� reporting agent (identificationnumber),

� type of report, and

� type of operation (according to themarket, issuer and investor);

� client information:

� country of residence,

� name,

� identification number, and

� institutional sector;

� securities information:

� issuer:

- country of residence,

- name,


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- identification number, and

- institutional sector,

� security:

- ISIN code

- code name,

- CFI code,

- number of securities issued,

- currency, and

- par value;

� portfolio:

� opening position,

� issues (or purchases on the primarymarket),

� redemption,

� purchases on the secondary market,

� sales,

� other changes,

� closing position,

� income,

� fees,

� taxes,

� number of securities in portfolio,

� custody account,

� market (country), and

� currency of transaction.

The Ministry of Finance publishes informationon securities already issued or intended tobe issued by the Republic of Slovenia (bondsand eurobonds) or by the Ministry of Finance(Treasury bills), including presentations ofsecurities, prospectuses, a calendar of issues,auction announcements and auction results,on the Ministry of Finance�s website(www.sigov.si). The Ministry of Finance sendsall data on government securities to the Bankof Slovenia by e-mail.


ATVP: authorisations granted to issuers forpublic offerings and organised trading (since1991, same day); annual report (since 1994,annually, six months after the end of thereporting year).

KDD: information on KDD members, issuersof securities, individual securities and investors(since January 1997, monthly, at the end ofmonth); information on foreign portfolioinvestments (since January 1997, daily, nextday); information needed for preparing abreakdown of securities portfolios by sectorof issuer and sector of investor (since March1998, quarterly, at the end of the reportingperiod).

Authorised participants in the securitiesmarkets, insurance companies, banks andresident issuers of debt securities abroad:monthly reports to the Bank of Slovenia(since September 1999, monthly, twenty daysafter the end of the reporting month).

Ministry of Finance: information published onthe Ministry of Finance�s website andreported to the Bank of Slovenia on bonds(since 1991, same day); eurobonds (since1996, same day); and Treasury bills (sinceMay 1998, same day).


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Data are mostly details of transactions madein a period and positions at the end of a period.Data are broken down by type of securityand by sector and country of the issuer andholder. Nominal values, market values andbook values are used to estimate outstandingamounts of securities.


Breaks in series are not relevant.

3.3.3 Revisions

Data are final and are not subject to revision.

3.4 Publications


There are no special statistical publicationswhich cover securities issues statistics.


Monthly Bulletin:



� Medium of publication: in hard copy (inEnglish and Slovene) and on the Bank ofSlovenia�s website (www.bsi.si) (in English).

Financial Markets:




Annual Report on the Securities Market:

� Source: ATVP.

� Frequency of publication: annually.

� Medium of publication: in hard copy andon the ATVP�s website (www.a-tvp.si)(only in Slovene).

Bulletin on Financial Markets in Slovenia:

� Source: Ministry of Finance.


� Medium of publication: in hard copy (onlyin Slovene).

3.5 Users

Internal users within the Bank of Slovenia,financial institutions and the general public.


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4.1.1 Definitions

According to the Securities Market Act, theForeign Exchange Act and the Law onBanking, financial derivatives are instrumentswhose value is directly or indirectlydependent on the price of an underlyingsecurity, foreign currency or commodity, oron the level of interest rates. Trading inderivative financial instruments is regulatedby the provisions of the acts and laws whichgovern trading in the underlying financialinstruments.

The following types of financial derivativesare traded in Slovenia:

forward contracts - agreements between aseller and a buyer concerning the purchaseor sale of an underlying financial instrumenton a specific date in the future (more thantwo working days after the transaction day);

futures - the same as forward contracts,except that they are standardised in amountand maturity and traded on the organisedmarket;

swaps - agreements concerning the exchangeof two different cash flows based on differentforeign currencies or different interest rates;

options - contracts which gives the ownerthe right but not the obligation to buy or sellan underlying financial instrument at anagreed price on or before the maturity day.


The Bank of Slovenia has a natural interest inmonitoring financial derivatives. As part ofits conduct of monetary policy in Slovenia,the Bank of Slovenia monitors and ensuresthe smooth functioning of the financial

markets, of which financial derivatives are apart.

Connections to global financial markets aremade through financial derivatives. Thisincreases the efficiency of the domesticmarket, but can also pose a threat to itsstability.


Under the Foreign Exchange Act, allcommercial banks are obliged to reporttransactions made on the foreign exchangemarket on a daily basis.



The Bank of Slovenia only collects data onforeign exchange forward contracts whichbanks enter into with other parties. The dataare reported directly by banks. The Bank ofSlovenia collects data on turnover on theforward exchange market for transactionsbetween banks and banks, between banksand enterprises, between banks and non-residents and between banks and households.For each type of transaction, the Bank ofSlovenia receives data on average forwardexchange rates for all maturities combinedand not for individual maturities.

The Bank of Slovenia also possesses data onforeign exchange swaps and foreign exchangeforward contracts entered into betweencommercial banks and the Bank of Sloveniafrom its own database). All financialderivatives are traded over-the-counter.


Banks which report transactions made on theforeign exchange market report prices and



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volumes for individual transactions on a dailybasis. The medium of data collection iselectronic.


Reporting agents provide data on a dailybasis. Time series are available reaching backto January 1996. Data on forward contractsreach back to October 1999.


4.3.1 Definition and methodology

Reporting agents (banks) report data dailyon individual transactions on the foreignexchange market. The same principle isapplied when creating a database of foreignexchange swaps and forward contractsbetween the Bank of Slovenia and commercialbanks. Weekly, monthly and yearly aggregatesare calculated by the Bank of Slovenia.


Breaks in series are accompanied by acomment if the nature of the change requiresexplanation.

4.3.3 Revisions

No revisions are made to data.

4.4 Publications


Data on foreign exchange forward contractsentered into by banks are not publishedregularly. There are irregular publications forresearch and analysis.

Data on foreign exchange swaps and forwardcontracts between banks and the Bank ofSlovenia are first published on the Bank ofSlovenia�s website within the framework ofthe Bank of Slovenia�s ten-day balance sheet(in English) and the Bank of Slovenia�smonthly balance sheet (in English).

The Bank of Slovenia�s ten-day and monthlybalance sheets are also published in the Bankof Slovenia�s Monthly Bulletin (see Sub-sections 2.4.1 and 3.4.2).


Data on foreign exchange swaps and forwardcontracts between the Bank of Slovenia andcommercial banks are also published usingthe International Monetary Fund�s SpecialData Dissemination Standard template�International reserves and foreign currencyliquidity�. The data is published monthly, nolater than the last working day of the month,on the Bank of Slovenia�s website(www.bsi.si).

4.5 Users

Financial derivatives statistics are primarilyintended for internal use within the Bank ofSlovenia. The statistics which are publishedare available to anyone.


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5.1.1 Definitions

Statistics published for commercial banksinclude average interest rates and interestrate spreads for deposits and loans. Thepublished rates are declared interest ratesprovided by the commercial banks at thebeginning of each month. Data are collectedon a monthly basis, but the figures for thelatest month are always provisional andsubject to correction in the following month.The average interest rates are weightedarithmetic averages of the minimum andmaximum interest rates that the banks chargeon loans and pay on deposits. The sources ofthe data are individual reports from thebanks. The spread is the difference betweenthe minimum and maximum interest ratesreported by the banks. Interest rates onloans and deposits are given in real terms(except for instruments with maturities ofup to one year, for which interest rates arealso given in nominal terms) and thenconverted into nominal terms using the TolarIndexation Clause (TOM) or the ForeignCurrency (EUR) Indexation Clause. TheTOM is the annual interest rate used forpreserving the value of financial liabilities andassets in domestic currency. The ForeignCurrency Indexation Clause is the growthrate of the Bank of Slovenia�s end of monthexchange rate for the Slovenian tolar againstthe euro.

The Bank of Slovenia also publishes theeffective interest rates of commercial banks.Average effective interest rates are calculatedon the basis of the interest charged duringthe period. Data are collected on a quarterlybasis.


For the Bank of Slovenia, the most importantreason for monitoring MFI interest rates is to

monitor the transmission of monetary policythrough interest rates. Other institutions arealso interested in interest rate movements,since many different financial analyses arebased on interest rates.


MFIs are obliged to report data on retailinterest rates to the Bank of Slovenia inaccordance with:

� the Law on the Bank of Slovenia;15 and

� the Law on Banking.16



In Slovenia, banks are classified in thefollowing groups:

� commercial banks;

� savings banks; and

� savings and loan undertakings.

Only commercial banks and savings banksare obliged to report retail interest rates.The Bank of Slovenia only publishes averageinterest rates for commercial banks, sincesavings banks are relatively insignificantcompared with commercial banks.


The reporting population (in April 2002)includes 21 commercial banks and threesavings banks (100% coverage). These report

5 Monetary financial institutions interest rate statistics

15 Official Gazette, Nos. 1/91, 58/02, 85/02.16 Official Gazette, Nos. 7/99, 102/00 and 59/01.


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real interest rates over the TOM or over theForeign Currency Indexation Clause, exceptfor Slovenian tolar-denominated instrumentswith maturities of up to one year. For thelatter, interest rates are reported also innominal terms, since the use of TOM forinstruments with maturities of less than oneyear is not allowed (since 1 July 2002).Reported real interest rates are thenconverted by the Bank of Slovenia intonominal rates. Interest rates are classified inthe following groups:

� short-term loans - working capital loans,consumer credit;

� long-term loans - for capital investmentsand housing;

� demand deposits;

� time deposits - up to 30 days, 31 to 90days, 91 to 180 days, 181 days to oneyear, over one year; and

� foreign exchange deposits.

The medium of data collection fromreporting agents is the local networkbetween banks and the Bank of Slovenia.

Interest rates are expressed as annualpercentages.


Reporting agents report data at the beginningof each month. Time series are availabledating back to December 1991. Averageinterest rates are calculated provisionally atthe beginning of each month. Final data aremade available with a one-month lag.



Reporting agents provide minimum andmaximum interest rates for each type ofinstrument. Average interest rates for thevarious types of instrument are thencalculated by the Bank of Slovenia (weightedaccording to amounts on the books ofindividual banks).


Breaks in series are accompanied by acomment if the nature of the change requiresexplanation.

5.3.3 Revisions

Revisions are made only to declared interestrates, since the published data are alwaysprovisional. Final data are available with aone-month lag. Minor corrections are madeto the previous month�s data when publishingdata for the current month.

5.4 Publications


Selected declared interest rates are firstreleased on the Bank of Slovenia website(www.bsi.si) in the first half of the month (inEnglish).

Both declared and effective interest ratesare also published in the Bank of Slovenia�sMonthly Bulletin:




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� Medium of publication: in hard copy (inEnglish and Slovene) and on the Bank ofSlovenia�s website (www.bsi.si) (inEnglish).


MFI interest rates are also published in theBank of Slovenia publication entitled FinancialMarkets:




5.5 Users

The main users of MFI interest rate statisticsare internal users within the Bank of Slovenia,banks and the general public who use thedata for financial analysis.


Financial Statistics Department - FinancialMarkets UnitTel.: +386 (1) 471 9000Fax: +386 (1) 251 55 16e-mail: [email protected]

6 Contacts at the Bank of Slovenia


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methodological manual on money, banking and financial market

Documents