Australian Financial Accounts: OVERVIEW OF DATA SOURCES AND

METHODSWithin a Whom to Whom Framework

Amanda Seneviratne

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Why?• Recently the ABS has had number of requests about how

ABS compiles financial accounts quarterly in a “to-whom-from-whom” (counterparty) framework

• This area of national accounting has received more attention since the global financial crisis and the G20 finance ministers “data gaps” initiative

• The note is only an introduction to the subject– Detailed compilation methods are dependent on national

institutional settings and data availability

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Intersectoral Net Financial Transactions: June Quarter 2011

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Inter Sector Financial Relationships• The inter sector financial relationship maps can be used as a

guide to priorities and methods for data collection and compilation

• The number of institutional units in each sector is a guide to the difficulty in measuring the sector quarterly, the timeliness and possibly the reliability of the measurement

• It is clear we can’t afford thorough quarterly surveys of households or non-financial corporations

• The following is a simplification in terms of sectoring and instruments. It covers both stocks and flows.

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Approximate Number of Institutional Units

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

Financial Corporations• Relatively small number of large institutions

– Setting aside the large number of small self-managed pension funds

• Maintain good accounting records• Prudential supervision for some types• We aim for complete enumeration of most types of

financial corporation• Interagency (APRA/RBA/ABS) cooperation in data

collection, quality assurance and usage.

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Data for Financial Corporations is central building block for measurement

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

Data for Financial Corporations is central building block for measurement

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

1. Almost complete coverage of Financial Corporations

2. Data broken down by counterparty (subsectors)

3. Regulatory and ABS surveys4. Intermediaries data from

regulator used for regulatory, monetary aggregates and financial accounts

Rest of World• Financial assets, liabilities, transactions, and other flows with

rest of world are required for quarterly International Investment Flows and Position statistics.– Difficult to do financial accounts without this significant dataset

• Some recompilation from BPM6 to 2008 SNA is required• Data by domestic counterparty should exist in this dataset

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Foreign Investment (IIP) Data is already collected for balance of payments purposes

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

X Data confrontation

Domestic counterparties required

Rest of World (cont.)• Note financial corporations / rest of world relationship now

has two sets of observations• Data confrontation for quality assurance of both datasets • Must decide what to publish in financial accounts

– Australia financial accounts usually consistent with IIP– Means re-balancing financial corporations– The luxury of choosing with whom to be inconsistent.

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General Government• Australia is a federation: Commonwealth, State, Territory and Local

governments• However, financial management practices mean that only a handful

of agencies have significant borrowing and investment roles– Commonwealth and State Treasuries / Department of Finance– State central borrowing authorities, Australian Office of Financial

Management• A small ABS collection of about 20 agencies gives almost complete

coverage• Securities issues in a security by security database

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Government Financing Agencies

GFS data not adequate for this purpose in Australia Small ASB collection

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

X

X Data Confrontation

X

X

General Government (cont.)• General government data overlaps with financial

corporations and IIP datasets– More data confrontation opportunities– More decisions about best data, including Reserve Bank versus Dept.

of Finance• Data structured in accordance with IMF GFS not sufficient

– Counterparty, instrument detail– Valuation principles, accrual standards– more explanation of differences (especially to IMF)

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Non-financial Corporations and Households• Securities issuance by non-financial corporations from equity

and debt market sources (stock exchange, clearance houses)• Small survey of large corporates to track security holdings

and accounts payable / receivable– All other financing covered by other sources

• Households residual in securities markets and accounts payable / receivable

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Small corporate survey for accounts payable/receivable

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

X

X

X

Residual in securities markets

Non-financial corporations and Households (cont.)• Periodic confrontation with household wealth surveys

– Micro / macro comparisons• No non-financial corporation financial asset and liability data

available in tax system or in summary from corporate regulators

• Financial Instrument Supply / Use compilation framework mitigates lack of direct data

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Small corporate survey for accounts payable/receivable

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Households

~ 9 million

Financial Corporations

3000 + 400K Pension Funds

Rest of the World

Very Many

General Government3000 of which 20

financing

Non-Financial Corporations

~ 2 million

X

X

X

Residual in securities markets

Compilation in Financial instrument Supply / Use framework provides a cross check and plausible residual allocation

Compilation Framework: Financial Instrument Supply / Use Tables• Ideally, independent measures of supply and use• Unconsolidated to a large extent

– Intra-household sector relations consolidated– Other intra sector asset/liabilities add value to supply / use tables– Note: ABS thinks unconsolidated sector income and financial

accounts are not meaningful.

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Supply / Use Framework Example 1: Transferable Deposits

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Transferable Deposits Example• Supply data are from banking regulator (APRA)• Use data are from various data sources, including

counterparty data collected by regulator• To the extent that use data do not sum to supply, balancing

requires adjustment of weakest data source(s), in this case usually “other private non-financial corporations”

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Supply / Use FrameworkExample 2: Listed Equity of Private Non-financial Corporations

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Listed equity example• Unconsolidated• Supply from stock exchange (adjusted for SNA concepts)• Use from various sources• Balanced with weakest data source in this case the residual is

allocated to households for which there is no data source– Note: plausibility of residual is assessed

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More Information• Australian National Accounts: Financial Accounts (cat. no.

5232.0) (and related products)• amanda.seneviratne@abs.gov.au• D.Cullen@abs.gov.au• http://www.apra.gov.au/statistics/ for regulatory datasets

and reporting forms

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