Gabriel QuirósHead of Macroeconomics Statistics DivisionEuropean Central Bank

Quarterly IntegratedEuro Area Accounts

Joint ECB NBRM Seminar on StatisticsSkopje, 4 October 2013

ECB-RESTRICTED

FINAL

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Euro Area Accounts

• Why: ECB as a key user of statistics

• What are the EAA?

• How: Integration of data sources

• Results + Uses

Annexes:

1 New ECB Guideline: Changes from 2014

2 Additional examples of uses

3 Links to data and publications

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Governing Council takesmonetary policy decisions basedon an overall assessment of the

risks to price stability

Monetary analysis(medium to long-term

trends in inflation)

Economic and financial information

cross-checking

Primary objective of price stability(annual increase in HICP of close but below 2% over

the medium term)

Economic analysisfocusing on a wide

range of economic and financial indicators

(short to medium-term risks to price stability)

An evidence-based decision-making requires a large amount of high quality European statistics

ECB as key user of European statistics

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What are the EAA ? Synopsis of inputs + outputs

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Euro AreaBuilding blocks :- BoP- MFI- IF + FVC- ICPF- GFS

National non-

financial accounts

Other :BoP-euro areaEuropean Institutions (ECB, ESM)

Quarterly Eurostat Press Releases on Household saving + Business

Investment

Quarterly ECB Press Release on Economic

and Financial

Developments

National Financia

l Account

s

Financial

Accounts

Non-Financi

al Accoun

ts

Integrated Euro Area Accounts

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GS S1 S11 S12 S13 S14_5 S2 GS S1 S11 S12 S13 S14_5 S2

B1G Value Added/GDPD1 Compensation of Employees

D21-D31 Taxes less subsidies on productsD29-D39 Other Taxes less subsidies on production

D4 P roperty IncomeD5 Taxes on income and wealthD61 Social security contr.D62 Social security benefitsD7 Current transfersD8 Equity attr to policy holdersD9 Capital TransfersK1 Consumption offixed capitalK2 Acq .-disp. of non-prod non-fin assetsP 3 F inal consumptionP 5 Gross Capital FormationP 6 ExportsP 7 ImportsB9 Net lending

B9F Net lendingF1 SDR and M onetary Gold

F2-4 Currency, Deposits, LoansF3 Securities oth. Than sharesF5 SharesF6 Insurance technical reservesF7 Oth. accs receivable/payable

TransactionsEuro area accounts Uses Resources

What are the EAA? Giving Indicators an Accounting Framework

GDP

M3

HH ConsumptionGov Deficit

Gov Debt

Available in 2007 Balance of P ayments

M acro Economic Data BSI Statistics (M F I Balance Sheets)

Integrating data sources: National data and euro area building blocks

The euro area accounts integrate a large number of different data sources•Non-financial sector accounts•Financial accounts: The ECB “MUFA” Guideline•Building blocks:

– Balance of Payments (BoP)

– MFI Balance Sheet Items (BSI)

– Quarterly Financial Accounts for General Government (QFAGG)

– …7

Euro Area Accounts

Quarterly Sector AccountsCountry Contributions

Monetary Union Financial AccountsCountry Contributions

Euro Area Accounts

Quarterly Sector AccountsCountry Contributions

Monetary Union Financial AccountsCountry Contributions

Balance of Payments and

International Investment Position

Euro Area Accounts

STPFS

GeneralGovernment

Fin.Acc.

MFIBalance Sheets

Security Statistics

Security Holding Statistics

Quarterly Sector AccountsCountry Contributions

Monetary Union Financial AccountsCountry Contributions

Balance of Payments and

International Investment Position

Euro Area Accounts

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Monetary Union Financial Accounts (MUFA) are compiled by combining national data - coming through the ECB MUFA Guideline - and euro area financial building blocks

Which criteria are followed when deciding the source for each cell in the matrix ?

– Data reliability

– User needs and preferences

– Minimize horizontal imbalances

– Future development of the accounts, in particular in terms of timeliness

The MUFA Guideline and building blocks

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Data sources: National financial accounts and building blocks (BSI, BOP, QFAGG)

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Uses – some example: Enriching monetary analysis

Financial investment by householdsAnnual growth rate

• Value of analysing M3 developments by institutional sector

• Closer link between M3 holdings by households and price developments (but headline M3 still better predictor of turning-points)

• Looking at M3 against total financial investment / broader portfolio of assets

• Role of OFIs and ICPFs for financial intermediation & monetary analysis

1) Excluding money market fund shares.*) Percentage point contributions to annual growth of financial investment.

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Integrating real and financial perspectives(NFC accumulation accounts : financing and investment)

* Internal financing (gross saving) includes retained earnings and consumption of fixed capital. It is broadly equivalent to earnings before depreciation but after taxes and dividend payments in business accounting.

• Bulk of capital formation financed internally (gross saving)*

• Role of equity financing modest (except 2000-01)

• Linked to financial investment / M&A

• Resurgence of debt financing after consolidation

• Reduction of debt financing in credit crisis

Percentage of GDP, four-quarter moving sum

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Changes in 2014: The new ECB MUFA Guideline

New financial instrument and sub-sector details due to SNA 2008 and ESA 2010 •MUFA Guideline (quarterly), ESA TP (annual) and G-20 Financial accounts template are harmonised to a large degree

Additional user needs for quarterly Euro Area Accounts•Publication of Euro Area Aggregates at t+90

=> transmission of selected “supplementary” qFA data at t+85 (82)•Publication of national data => second transmission of detailed (revised) qFA at t+100 (97)•Other changes in volume and revaluations for all instruments•Whom-to-whom for securities (in addition to deposits and loans)(See Annex 1 for more details)

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Euro Area Accounts Overview

Thank you for your attention!Any questions?

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Annex 1: New ECB Guideline: Changes from 2014

Content

Tables

Data type Reference

period

1st

Reporting date

Timeliness

Stocks

Trans-actions

Other changes

in volume

Supplementary data for euro area ggregate (selected items)

T1 – assets T2 – liabilities T4 – short-term loans (w-t-w) T5 – long-term loans (w-t-w)

2012Q4 onwards

Sep 2014

Until December 2016: t+85 From March 2017 onwards: t+82

National data - from first transmission

T1 – assets T2 – liabilities T3 – deposits (w-t-w) T4 – short-term loans (w-t-w) T5 – long-term loans (w-t-w)

2012Q4 onwards

Sep 2014 Until December 2016: t+100 From March 2017 onwards: t+97

National data - w-t-w for securities

T6 – short-term debt securities (w-t-w) T7 – long-term debt securities (w-t-w) T8 – listed shares (w-t-w) T9 – investment fund shares (w-t-w)

2013Q4 onwards

Sep 2015 Until December 2016: t+100 From March 2017 onwards: t+97

National data - additional backdata

T1 – assets T2 – liabilities T3 – deposits (w-t-w) T4 – short-term loans (w-t-w) T5 – long-term loans (w-t-w)

1999Q1–2012Q3

Sep 2017 Until December 2016: t+100 From March 2017 onwards: t+97

Annex 2: Additional examples of uses- ESRB : Households’ debt-to-gross disposable income ratio

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Notes: Gross disposable income adjusted for the change in net equity of households and pension fund reserves.For Luxembourg, the first observation refers to 2008.For Bulgaria the last observation refers to 2010. For Cyprus, Estonia, Greece, Hungary, Lithuania, Luxembourg, Latvia, Romania, Slovakia and Slovenia the last observation refers to 2011. Data for Malta and Croatia are not available.

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Net worth of households

Source ECB/Eurostat

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Households gross disposable income

Source ECB/Eurostat

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Annex 3: Where to find?

ECB Website:Euro Area Accounts in Statistics : EAA HomepageSDW Tables and downloads• MOBU Tables:

Integrated economic and financial accounts by institutional sector,  euro area non-financial accounts, households, non-financial corporations, insurance corporations and pension funds, and all euro area accounts time series

• EAA Detailed Tables: Main indicators, integrated economic accounts, institutional sectors, and who-to whom detail

• Country Tables : Euro area and other EU countriesPress releases : EAA – press releaseArticles• MOBU Article 2007 November• MOBU Article 2011 October