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MONEY, BANKING ANDFINANCIAL MARKETSTATISTICS IN THE

ACCESSION COUNTRIES

METHODOLOGICAL MANUAL

VOLUME I

May 2003

THE CURRENT DEFINITIONAND STRUCTURE OF MONEYAND BANKING STATISTICS

IN THE ACCESSION 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.

ISBN 92-9181-342-7 (print)

ISBN 92-9181-343-5 (online)

3ECB • Money, Banking and Financial Market Statistics in the Accession Countries – Volume I • May 2003

Contents

List of Contributors .................................. 9

Foreword ....................................................... 11

Introduction to the countrychapters ......................................................... 13

Summary of progress ............................... 16

Bulgaria ....................................................... 27

List of abbreviations .................................. 28

1 Legal and institutionalbackground .......................................... 29

1.1 Organisational structure ....................... 29

1.2 Legal background .................................... 29

1.3 Institutional aspects ............................... 29

2 Monetary statistics .......................... 33

2.1 Legal background and statisticalstandards .................................................. 33

2.2 Concepts and definitions ...................... 34

2.3 Monetary institutions ............................ 38

2.4 Banking business: generaldeposits/other products ....................... 39

2.5 Statistical balance sheets ofthe monetary institutions ..................... 39

2.6 Measure(s) of money: definitionsand remarks ............................................. 41

2.7 Counterparts of money ........................ 42

2.8 Reserve money ....................................... 43

2.9 Reporting procedures ........................... 43

2.10 Data processing and compilationmethods .................................................... 44

2.11 Publications .............................................. 45

3 Contacts at the BulgarianNational Bank ..................................... 46

Cyprus ......................................................... 49









2.3 Population of monetaryinstitutions ............................................... 65


2.5 Statistical balance sheets of themonetary institutions ............................ 66

2.6 National measure(s) of money:definitions and remarks ......................... 69


2.8 Reserve money ....................................... 70



2.11 Publications .............................................. 72

3 Contacts at theCentral Bank of Cyprus ................ 73

Annexes ......................................................... 74

Central Bank of Cyprus OrganisationStructure ........................................................... 74

Annexes ......................................................... 47

Organisation chart of the BulgarianNational bank (BNB) ........................................ 47

Statistics Directorate ....................................... 48

ECB • Money, Banking and Financial Market Statistics in the Accession Countries – Volume I • May 20034

Estonia ......................................................... 101







2.1 Legal background andstatistical standards ................................ 109







2.8 Reserve money ....................................... 117



2.11 Publications .............................................. 119

3 Contacts at the Bankof Estonia ............................................. 120

Annexes ......................................................... 121

Organisation chart of the Bankof Estonia ........................................................... 121

Organisation chart of the StatisticsDepartment and Financial StabilityDepartment of the Bank of Estonia .............. 122

Hungary ....................................................... 123




Czech Republic ....................................... 75











2.5 Statistical balance sheets of themonetary financial institutions ............. 88

2.6 Measure(s) of money:definitions and remarks ......................... 89


2.8 Reserve money ....................................... 91



2.11 Publications .............................................. 96

3 Contacts at theCzech National Bank ..................... 97

Annex .............................................................. 98

Organisation chart of theCzech National Bank ....................................... 99


Latvia ............................................................ 143
















2.8 Reserve money ....................................... 136



2.11 Publications .............................................. 138

3 Contacts at theNational Bank of Hungary ........... 139

Annexes ......................................................... 140

Organisation chart of the National Bankof Hungary (NBH) ............................................ 140

Organisation chart of the StatisticsDepartment of the NBH ................................. 141









2.8 Reserve money ....................................... 159



2.11 Publications .............................................. 162

3 Contacts at the Bankof Latvia ................................................ 163

Annexes ......................................................... 164

The Bank of Latvia’s Structure ....................... 164

Structure of the Statistics Departmentat the Bank of Latvia ......................................... 166

Lithuania ...................................................... 167









Malta ............................................................. 187

















2.8 Reserve money ....................................... 181



2.11 Publications .............................................. 193

3 Contacts at the Bankof Lithuania .......................................... 184

Annex ............................................................. 185

Organisation chart of the Bankof Lithuania ....................................................... 185




2.8 Reserve money ....................................... 201



2.11 Publications .............................................. 205

3 Contacts at the CentralBank of Malta ..................................... 206

Annexes ......................................................... 207

Organisation chart of the Central Bankof Malta (CBM) .................................................. 207

Organisation chart of the Statistics Section(within the Economics Department) ............ 208

Organisation chart of the Balanceof Payments Office ........................................... 209

Organisation chart of the Financial StabilityOffice .................................................................. 209

Poland ........................................................... 211












2.5 Statistical balance sheets ofthe monetary institutions ..................... 224


2.7 Counterparts of money .......................... 226

2.8 Reserve money ....................................... 227


2.10 Data processing andcompilation methods ............................. 229

2.11 Publications .............................................. 230

3 Contacts at the NationalBank of Poland .................................. 231

Annexes ......................................................... 232

Organisation chart of the National Bankof Poland (NBP) ................................................ 232

Organisation chart of the StatisticsDepartment of the National Bank ofPoland (NBP) ..................................................... 233

Slovakia ....................................................... 253












Romania ....................................................... 235














2.8 Reserve money ....................................... 247



2.11 Publications .............................................. 249

3 Contacts at the NationalBank of Romania .............................. 250

Annexes ......................................................... 251

Organisation chart of theNational Bank of Romania (NBR) ................. 251

Organisation chart of the StatisticalDepartment of the NBR.................................. 252


Slovenia ....................................................... 277












2.6 Monetary aggregates: definitionsand remarks ............................................. 290


2.8 Reserve money ....................................... 290



2.11 Publications .............................................. 293

3 Contacts at theBank of Slovenia ................................ 294

Annexes ......................................................... 295

Organisation chart of theBank of Slovenia ................................................ 295

Organisation chart of the Statistics Departmentof the Bank of Slovenia ................................... 296



2.8 Reserve money ....................................... 270



2.11 Publications .............................................. 273

3 Contacts at the NationalBank of Slovakia ................................ 274

Annexes ......................................................... 275

Organisation chart of the National Bankof Slovakia (NBS) .............................................. 275

Organisation chart of the Statistical workat the NBS ....................................................... 276


List of contributors

Bulgaria

Bulgarian National Bank Violeta PeichevaBoyka ZagorovaKatia Mincheva

Cyprus

Central Bank of Cyprus Eliana PsimolophitouAndroulla MelifronidouChristina Nicolaidou

Czech Republic

Czech National Bank Zbynek KarnetIva ChrtkovaMagda Gregorova

Estonia

Bank of Estonia Liina Seestrandt

Hungary

National Bank of Hungary Szilvia Veres

Latvia

Bank of Latvia Zigrida AustaInara LindeGunta Andersone

Lithuania

Bank of Lithuania Gintaras DaugëlaRomas Karaliûnas

Malta

Central Bank of Malta Jesmond PuleRoderick Psaila


Poland

National Bank of Poland Anna LewandowskaJoanna Glowala

Romania

National Bank of Romania Virgil Stefanescu

Slovakia

National Bank of Slovakia Ivana BrziakovaKarol MachacekDaniela MarekovaAndrea Bernathova

Slovenia

Bank of Slovenia Dušan MurnTomo Narat

European Central Bank Alda Morais


Foreword

Background

The initiative to compile a Manual on thecurrent definition and structure of moneyand banking statistics in the Accession Countries(hereinafter referred to as the”Methodological Manual”) was launched atthe inaugural money and banking statisticsseminar with the national central banks(NCBs) of the 12 Accession Countries1 heldat the European Central Bank (ECB) inFrankfurt am Main on 15 and 16 December1999.

The Manual is divided into two Volumes. Thisvolume (Volume I) presents the currentframework for the collection and compilationof monetary statistics and providesinformation on the legal and institutionalbackground to the compilation of thesestatistics2. It also describes the extent towhich the Accession Countries already meet(or will in the near future) the ECB’sstatistical requirements and compile statisticsthat are conceptually consistent with the euroarea monetary statistics.

The legal framework for the provision ofstatistics on the balance sheets of monetaryfinancial institutions (MFIs) in the euro areais set out in ECB Regulation ECB/2001/13 of22 November 2001 concerning theconsolidated balance sheet of the MFI sector,as amended, and in ECB Guideline ECB/2003/2 of 6 February 2003 concerning certainstatistical reporting requirements of the ECBand the procedures for reporting by theNCBs of statistical information in the field ofmoney and banking statistics. ECB RegulationECB/2001/13 is addressed to the reportingagents located in the euro area, and sets outin detail the statistical information they arerequired to submit to the NCB of theircountry of residence regarding MFI balancesheet statistics in order to meet the ECB’srequirements. The Guideline addresses theNCBs located in the euro area (”participatingNCBs”) and specifies the information (onboth MFI balance sheet statistics and on other

money and banking statistics) which must besubmitted to the ECB as well as the technicalprocedures to be followed in the datasubmissions.

Although the ECB’s main tasks relate to theeuro area, the ECB also has responsibilitiesunder the Treaty towards Member States ofthe European Union (EU) which have not yetjoined the euro area. It is acknowledged that,on average under “fast track” conditions, itmay take two years to implement statisticalchanges in reporting systems from the timethe Member States start discussing therequirements with reporting institutions totheir full implementation. Therefore, thework on the changes in the statistical systemsneeded to meet the requirements for euroarea money and banking statistics shouldbegin well in advance, in order to ensure thatstatistics are available by the time MemberStates join the euro area.

In order to provide the ECB with harmonisedmoney and banking statistics, the AccessionCountries will be required to modify, tovarying degrees, the structure of the statisticsthey currently collect from reportinginstitutions and to extend their coverage toall those financial institutions that fall underthe MFI definition.

It is in this connection that the compilationand regular update of a methodologicalmanual on money and banking statistics inthe Accession Countries is seen as aparticularly important task that is part of thework necessary to prepare countries foraccession to the EU and eventual membershipof the euro area.

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

2 The first edition of the Methodological Manual, Volume I, waspublished in April 2001. The first edition of Volume II (entitled”Current framework for statistics on other financialintermediaries, financial markets and interest rates in theAccession Countries”) is being published in conjunction with thisVolume.


Aim

The aim of this second edition of theMethodological Manual (Volume I) is to assessdevelopments in the statistical framework forthe collection and compilation of money andbanking statistics in the Accession Countries(namely the extent to which they areprogressively becoming compliant with ECBstatistical standards), and thereby to support

the conceptual and practical harmonisationwork necessary to prepare these countriesfor membership of the EU and, eventually,the euro area. The present edition containsinformation as at end-December 2002,although anticipated changes up to the end ofJune 2003 are also mentioned.

Structure

The Methodological Manual (Volume I) isdivided into 12 country chapters, one chapterper country. Each chapter consists of threeparts: Part I deals with the legal andinstitutional background, Part II withmonetary statistics and Part III with thecontacts at the NCBs of the AccessionCountries.

Part One briefly describes the legal andinstitutional structure of the NCBs of theAccession Countries and their statisticaldepartments/work. This overview containsinformation on the further sources ofinformation that are available at the nationallevel, namely the websites where the basictext of the national laws and regulationsmentioned can be found.

Part Two presents the national frameworksfor the collection and compilation ofmonetary statistics in the AccessionCountries, describing in detail the collectionof balance sheet data from monetaryinstitutions and the compilation of thenational monetary aggregates andcounterparts. Any future plans to adapt thenational collection systems to ECB standardsare also mentioned.

Part Three lists the contacts at the NCBs towhom any queries concerning the issuesdescribed in the respective country chaptershould be addressed.

Status of the Manual

In the Accession Countries, theMethodological Manual is available to thegeneral public from the NCB of the countryconcerned. Other interested parties mayrequest copies from the ECB, at the followingaddress:

European Central Bank,Press DivisionKaiserstrasse 29, D - 60311 Frankfurt am MainFax: + 49 (69) 13 44 7404

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

The Methodological Manual is available onlyin English, with translations into nationallanguages left to the discretion of the NCBsof the Accession Countries.


1 Legal and institutional background

Introduction to the country chapters

This part provides a short overview of thelegal and institutional structure of the NCBsof the Accession Countries and, in particular,their statistical departments/work.

1.1 Organisational structure

This section provides a brief description ofthe organisation of the NCBs (see theorganisation chart(s) at the end of eachcountry chapter). It also gives a detaileddescription of the organisation of thestatistical departments/work at the NCBs,focusing on those areas responsible for thecompilation of money and banking statistics.

1.2 Legal background

This section analyses the national legalbackground for the activities of the NCBs,indicating the most important national laws,regulations and specific provisions thatprovide the framework for their activities.Where applicable, the website is indicatedwhere the basic text of the laws and

regulations mentioned in this section can befound.

1.3 Institutional aspects

This section introduces the NCBs and brieflydescribes their role, functions andresponsibilities (e.g. statutory responsibility,banking supervision and activities vis-à-vis theGovernment and other public bodies). The mainactivities relating to macroeconomic statisticscarried out by the NCBs and by other publicauthorities (including the co-operation betweenthem) in the area of money and bankingstatistics, reserve base statistics, financialaccounts, balance of payments statistics andprudential supervision are also indicated. Thestatistical data collection and compilation of theabove-mentioned areas of statistics aredescribed (as shown in Table 1). This descriptioncovers the type of data collected, the frequencyand timeliness, the relevant sources of data, thecollecting agents, the users of the statisticsproduced and an overview of the statistical datacollection and compilation systems (e.g. themedia of data collection).

2 Monetary statistics

This part presents the current frameworkfor the collection and compilation ofmonetary statistics in the AccessionCountries. It describes in detail the collectionof balance sheet data from monetaryinstitutions and the compilation of nationalmonetary aggregates and counterparts.

2.1 Legal background and statisticalstandards

This section analyses the national legalbackground to monetary statistics, indicatingthe national laws, regulations and specificprovisions that apply to monetary statistics.Where applicable, the website is mentionedwhere the basic text of the laws and

regulations mentioned in this section can befound. It also indicates the statisticalstandards followed in the field of monetarystatistics, including international statisticalstandards (ESA 95, SNA 1993 and the IMFManual on Monetary and Financial Statistics).

2.2 Concepts and definitions

This section analyses a number of concepts anddefinitions for monetary statistics. Regarding theresidency principles for the purposes ofmonetary statistics, it presents the definition ofthe economic territory and provides the exactboundaries of the economic territory comparedwith the geographic territory. It also defines theconcept of residency for both natural persons


and enterprises (in particular, the residency offoreign branches of domestic banks and theresidency of domestic branches of foreignbanks). With respect to the sectorisationprinciples of monetary statistics, it presents thesectors into which the national economy is splitfor the purposes of compiling monetary statistics(as shown in Table 2). It also indicates how thisbreakdown corresponds to the ESA 95 and tothe ECB classification of ESA 95 sectors intomoney-creating, money-holding, money-neutraland non-resident sectors (as shown in Table 3).Where relevant, deviations between the sectorsof the national economy and the ESA 95 arebriefly explained.

2.3 Population of monetary institutions

This section describes the money-creatingsector within monetary statistics. The nationaldefinition of a credit institution (bank) and thelegal references to the definition are given. Anyother monetary institutions which are notcommonly known as credit institutions (banks),but which are nevertheless included in themoney-creating sector (e.g. money marketfunds), are also defined. For each category ofcredit institutions and of other monetaryinstitutions indicated, the number of institutionsis provided in Table 4. It is also indicatedwhether deposit liabilities of central governmentunits (e.g. Post Office savings accounts of theTreasury or the Post Office) are included in themeasures of money.

2.4 Banking business: general deposits/other products

This section outlines the general deposit andother banking products offered by creditinstitutions and by other monetaryinstitutions.

2.5 Statistical balance sheets of themonetary institutions

This section describes the main statisticalbalance sheet items (liabilities and assets) and

their breakdown by instrument/maturity,counterparty and currency.

2.6 Measure(s) of money: definitionsand remarks

This section defines the main measures ofmoney, from the narrowest to the broadestaggregates. The corresponding instrumentbreakdown for each aggregate is listed in Box1. It also describes how holdings of negotiableinstruments issued by monetary institutions(i.e. any negotiable instruments which arefreely transferable, such as cash, certificatesof deposit, commercial bills and other bearerpaper), are explicitly or implicitly allocatedbetween the various economic sectors.

2.7 Counterparts of money

This section analyses the counterparts ofmoney (net external assets, domestic credit– net claims on the central government,claims on the private sector – other netitems). This information is shown in Box 2.The classification available on credit todomestic residents (by sector, type andmaturity) is also provided.

2.8 Reserve money

This section describes the relevant conceptsof reserve money (reserve money, basemoney, monetary base) compiled by theNCBs of the Accession Countries.

2.9 Reporting procedures

This section describes the reporting proceduresfor the compilation of monetary statistics. Itcovers the specific legal or other regulatorypowers granted to the NCB and to other agentswith respect to collecting data from themonetary institutions for the compilation ofmonetary statistics. It also describes thereporting coverage of the population ofmonetary institutions for the balance sheet data.


Table 5 shows the number of reportinginstitutions per category of monetary institutionand their contribution to the total of thecategory and to the total balance sheet of allinstitutions. This section also describes thereporting schemes for monetary statistics bytype of monetary institution. This descriptioncovers the reporting population (the reportingcoverage), the data collected (e.g. full balancesheet data or selected components), thefrequency and timeliness, the methodologicaland accounting rules and the medium of datacollection (e.g. paper, electronic).

2.10 Data processing and compilationmethods

This section provides information on the basisof calculation (e.g. end-of-period data, mid-

period, average data), the revision proceduresapplicable to monetary statistics and thecompilation of flows statistics, whereapplicable (in particular how adjustments forbreaks in series and other adjustments aremade). This section also addresses theseasonal adjustment of data.

2.11 Publications

This section indicates how monetary statisticsare first released to the public (e.g. source,type of data released, format, time andmedium of the publications). It also indicatesthe main weekly/monthly publications formonetary statistics, where these differ fromthe first publication, as well as any otherrelevant statistical publications for monetarystatistics.

3 Contacts at the national central bank of the Accession Country

This part lists the contacts at the NCBs ofthe Accession Countries, to whom anyqueries concerning the issues described in

the respective country chapter should beaddressed.


Summary of progress made in terms ofimplementation of the ECB’s statisticalreporting requirements

Introduction

This chapter provides a summary assessmentof recent progress made by the AccessionCountries in the implementation of the ECB’sstatistical requirements. It highlights a numberof key issues in the statistical practicesfollowed by the Accession Countries in thecompilation of their national statistics when

compared to the statistical requirements ofthe ECB. References to practices in theAccession Countries correspond to thesituation as at end-December 2002, butreflect, where appropriate, existing plans forchanges to the statistical systems up to theend of June 2003.

Statistical standards followed in the Accession Countries

ECB requirements. The ECB Regulation ECB/2001/13 concerning the consolidated balancesheet of the MFI sector (as amended) sets out indetail the ECB’s requirements for euro areamoney and banking statistics. The Regulationestablishes the statistical standards according towhich statistical data must be collected andcompiled in order to meet ECB requirements.The Regulation comprises two main elements:(i) the definition of the reporting population formonetary statistics; (ii) a specification of thestatistical information that reporting agentslocated in the euro area are required to submitto the NCB in their country of residence in orderto meet those requirements. Where appropriate,the ESA 95 constitutes the main reference workfor euro area money and banking statistics, interms of the classification by instrument andsector. In respect of the classification by sector, avery close link between ESA 95 and euro areamoney and banking statistics is ensured by theinclusion of the MFI sector as defined by the ECBin the ESA 95. Hence, the definition of thereporting population for monetary statistics (theMFI population) is fully transposed into theESA 95 sectorisation, corresponding to the sub-sectors S121 (The central bank) and S122 (Othermonetary financial institutions). The accountingrules followed by MFIs in drawing up theiraccounts comply with the national transpositionof the EU Bank Accounts Directive together withany other applicable international accountingstandards, such as the International AccountingStandards (IAS) developed by the InternationalAccounting Standards Board (IASB). Furtherrecommendations to national compilers regardingthe standards to be followed in euro area money

and banking statistics (valuation of instruments,netting procedures, time of recording, etc.) maybe found in the Guidance Notes to the ECBRegulation ECB/2001/13 (ECB, November2002).

Several Accession Countries have alreadyadopted the statistical recommendations ofthe ESA 95 and have broadly harmonised thecompilation of monetary statistics in line withECB requirements (this refers only to stocks;progress is less well advanced with regard toflow statistics – see below). This is the casein the Czech Republic, Estonia, Hungary, Latvia,Poland and Slovakia. Individual developmentsindicated by some of the countries concernedare as follows:

• The Czech Republic has indicated that therequirements in the field of balance sheetstock statistics contained in ECB/2001/13have already been adopted for banks (infact, the national requirements cover morethan what is required by the ECB). Table 1is compiled on a regular basis, while thepreparatory work on the compilation ofthe other tables on stocks is progressingwell.

• In Hungary, monetary statistics will satisfythe ECB criteria related to monetarystatistics in the course of by 2003.

• Latvia is also already compiling monetaryand banking statistics in accordance withECB/2001/13 (only the sector classificationused still differs slightly from the


institutional breakdown in the ESA 95), asthis country has adopted a new Regulationrequiring the information needed toprepare Tables 1 to 4 of ECB/2001/13.

• The same applies to Slovakia, which hasbeen receiving stock data fully in line withECB/2001/13 since January 2003.

In terms of accounting rules, a number ofAccession Countries (Bulgaria, Cyprus, CzechRepublic, Malta, Latvia, Estonia, Poland, Slovakiaand Slovenia) have indicated that theircountries have already adopted the EUDirectives on accounting3 and the IAS.

The other Accession Countries still lack fullharmonisation of their monetary statisticswith the ECB requirements. However, thework towards harmonisation in this area is ingeneral already well underway (only Romaniahas not indicated any plans about theimplementation of ECB requirements):

• In Bulgaria, 2003 will be a transitional yearfor the implementation of the ECBrequirements regarding stock data, withwork on the full harmonisation with ECBstandards having already started. Theenvisaged changes aim at obtaining fullcompliance with the sector classificationof the ECB, the identification of thebalances dominated in euro, USD andother foreign currencies, and the maturitybreakdown used by the ECB. Indeed, insome aspects the national requirementswill cover more than what is required bythe ECB.

• In Cyprus, a Sector Manual in accordancewith the ESA 95 is now being finalised,which will be used both to implement theECB’s statistical requirements and tocompile the financial accounts. The workon the harmonisation of monetary statisticswith ECB requirements has already begunwith the creation of a joint working

committee in charge of the design andintroduction of a new reporting scheme.This scheme will permit the collection ofall the necessary data from MFIs, thussatisfying both the ECB’s statisticalrequirements and the supervisory needsof the Central Bank of Cyprus (CBC).Harmonised data is scheduled to becompiled upon accession. The revision ofthe statistical framework will allow fullcompliance with the Regulations andGuidelines of the ECB, the IMF Manual onMonetary and Financial Statistics (2000),as well as with the statistical requirementsof the Bank for International Settlements.

• Malta plans to achieve full harmonisationwith the ESA 95 and the latest ECBstatistical standards by mid-2003. Theperiod between mid-2001 and mid-2003has been dedicated to designing and makingthe necessary preparations for theimplementation of new reporting returnsthat will satisfy the current ECBrequirements.

• Lithuania has developed draft versions ofnew reporting returns and instructions inline with the ECB requirements set out inECB/2001/13. These reporting returns areaddressed to credit institutions subject tominimum reserves and are expected to beadopted in 2003.

• Slovenia has adopted a Regulationintroducing the classification ofinstitutional sectors in line with theESA 95. Since 2000, a gradual alignment tothe ECB standards has taken place,including major changes to the reportingscheme, which already enables thecalculation of harmonised monetaryaggregates and their counterparts.

3 e.g. the Council Directive of 8 December 1986 on the “Annualaccounts and consolidated accounts of banks and other financialinstitutions” (86/635/EEC).


The residency principle

ECB requirements. The residency principlesapplied by the respective countries also followthe ESA 95 and SNA 1993 (and, consequently,the IMF Balance of Payments Manual, 5th edition),whereby the country of residence of aninstitutional unit is determined by its centre ofeconomic interest.

In terms of the application of the residencyprinciples within money and banking statistics,particular attention should be paid to thetreatment of financial institutions located inoffshore centres (understood as territories withbanking sectors dealing primarily with non-residents and/or in foreign currency, on a scaleout of proportion to the size of the host country).In the framework of euro area money andbanking statistics, offshore institutions are treatedstatistically as residents of the territories in whichthey are located, just like any other residentinstitution.

International or administered banking units(IBUs/ABUs) in Cyprus, which are mainlybranches of foreign banks or subsidiaries offoreign banks incorporated in Cyprus, havealways been considered as non-residentinstitutions because they are required toconfine themselves to transactionsdenominated in currencies other than CYP,and primarily to customers that are notresidents of Cyprus4. For this reason, theseinstitutions are not currently part of the

4 As from 1 January 2001, IBUs and ABUs have been permittedto grant medium and long-term loans in foreign currencies toresidents.

reporting population for the compilation ofmonetary statistics. However, since January2002, when the new statistical definition ofresidency set out in a new directive enteredinto force, IBUs/ABUs have been consideredas resident for b.o.p. and internationalinvestment position (i.i.p.) statisticalpurposes. This definition will also be adoptedfor monetary statistics, in the context of thefull implementation of the ECB’s statisticalrequirements (scheduled to be completedupon accession). The full harmonisationprocess will be facilitated by the abolition ofthe Exchange Control Law upon accession.

Until recently, most offshore non-bankinginstitutions in Malta were treated as non-residents because, although the place ofregistration of such companies was Malta,they were not seen as having a centre ofeconomic interest in the country. As from2003, any firm that either prepares a set ofaccounts, pays income tax in the country orexpects to have a presence there for oneyear or more, is seen as having a centre ofeconomic interest in Malta and, consequently,considered as resident. Thus, there will nolonger be a distinction between offshore andonshore companies. In fact, according to thelaw, all licensed offshore business may onlycontinue to operate until 2004 at the latest. Forthe moment, there is only one international(offshore) bank operating in Malta.

The population of monetary institutions and some borderline cases

ECB requirements. The ECB calculates the euroarea monetary aggregate M3 as the amount ofcurrency in circulation plus other monetaryliabilities issued by the resident money-issuingsector (in the case of deposits, also certainliabilities issued by central government) that areheld by the resident money-holding sector. In thiscontext, the resident money-issuing sectorcorresponds to the euro area monetary financialinstitutions (MFIs), the resident money-neutralsector to the euro area central government, andthe resident money-holding sector to the euro

area residents except MFIs and centralgovernment. The MFI sector comprises, inaddition to central banks, credit institutions asdefined in Community Law and other MFIs, withthe other MFIs in practice comprising moneymarket funds (MMFs) plus a few otherinstitutions.


The MFI definition is currently beingimplemented by all Accession Countries inthe context of the compilation of theprovisional List of MFIs in the AccessionCountries5. In respect of the first part of thedefinition concerning credit institutions, theongoing integration of the acquiscommunautaire into national legislationensures that the EU concept of creditinstitutions is either already applicable or willsoon be so in the Accession Countries.Furthermore, regarding MMFs, manyAccession Countries have taken steps toimplement this concept into their statisticalsystems.

Credit institutions: some borderlinecases

For the reasons mentioned above, IBUs/ABUsin Cyprus are still considered as non-residentwith regard to monetary statistics. Currently,they are not included in the reportingpopulation for monetary statistics and do notbelong to the money-creating sector(although they are banks, licensed to carryout banking business from within Cyprus). Theabolition of the Exchange Control Law willenable the CBC to consider IBUs/ABUs asresident institutions with regard to monetarystatistics by accession. Co-operative creditand savings societies (CCSSs) in Cyprus arealso currently not included in the reportingpopulation for the compilation of monetarystatistics (although they account for aboutone-third of the total deposits in Cyprus)6.The other financial institutions (OFIs) sector,which used to include specialised banks anddesignated financial institutions, ceased toexist in Cyprus in September 2001. Theseinstitutions have been reclassified as creditinstitutions within the domestic bank (DB)sector. Hence they are included in both themoney-creating sector and the monetaryaggregates. Finally, it should be noted thatthere are two DBs that hold a restrictedbanking licence and are not currently includedin the money-creating sector. IBUs, ABUs,CCSSs and the two DBs with a restrictedbanking licence (which are included in the

provisional List of MFIs because they fulfil thedefinition of credit institutions) will, uponaccession, form part of the reportingpopulation in the area of money and bankingstatistics.

In the Czech Republic, credit unions (calledsavings and credit co-operatives) are classifiedas belonging to the MFI sector and included inthe provisional List of MFIs, but will only beincluded in the money-creating sector in themoney and banking statistics as from 2004.However, the number of active credit unions isconstantly declining7. As the amount of depositswith credit unions is approximately only 0.1%of the total bank deposits of the resident money-holding sector, it might be more cost-effectiveto apply the cutting-off-the-tail principle to theseinstitutions.

As from 2003, credit co-operatives in Romaniawill no longer be excluded from monetarystatistics coverage because they are nowsubject to the central bank’s regulations andsupervision. The central bodies of such creditco-operatives (covering a network of severalhundred individual co-operatives) will startreporting the necessary monetary data. Sofar, only one central body has beenauthorised, but the process of grantinglicenses to other such bodies will continue inthe near future.

In Slovenia, the 2 savings banks and 28 savingsand loan undertakings (which provide servicesto a limited circle of clients) are not includedin the money-creating sector in nationalmonetary statistics, because of the partly

5 A provisional List of MFIs in the Accession Countries was firstpublished in 2001, with the reference date end-December 2000.Updated versions have been published since then on an annualbasis.

6 The main reason being that they are neither subject to thesupervision of the NCB nor to the prudential standards thatapply to credit institutions. CCSSs have indirect access tomonetary credit through the Co-operative Central Bank (whichacts as their central bank) but are not subject to the regulationsissued by the Central Bank of Cyprus.

7 As at December 2002, there were only 46 credit unionsoperating without restrictions and one operating undercompulsory management. The number of credit unions includedin the provisional List of MFIs in December 2000 was 79.


incomplete breakdown of their accounts inthe past and non-compliance with the bankinglaw. These are indeed very small monetaryfinancial institutions, whose aggregatedbalance sheet has never exceeded 2% of thebalance sheet of the commercial banks. Theharmonisation of these institutions with thebanking law provisions will be achieved in2004, making it feasible to include them inthe money-creating sector in line with theECB requirements.

Credit unions in Latvia do not fall under thecategory of credit institutions. These are co-operative associations with a variable numberof members and capital, established toprovide financial services to their membersas stipulated by the Law on Credit Unions.They are, however, included in the reportingpopulation for money and banking statistics.

Co-operative-type institutions in Estonia alsodo not fall under the category of creditinstitutions. They cannot receive depositsfrom the public, only from their members.They may also only grant loans to members,and their activities are restricted to a certainterritory. Although there are currently 11such institutions, only two of them voluntarilysubmit balance sheet data on a monthly basis.These two are included in the calculation ofEstonian monetary aggregates.

Money market funds

A preliminary analysis made by Poland hasshown that the criteria of the MMF definitionare fulfilled by some investment funds,although the NCB still does not collect anyinformation from them and they are notincluded in the provisional List of MFIs. Thevalue of their assets (total) is beingmonitored, but at present this business ismarginal in comparison with the depositsplaced with the banking sector.

In Hungary, MMFs have been identified andincluded in the provisional List of MFIs since

June 2002, but have been included in themoney-creating sector of money and bankingstatistics since the beginning of 2003. Thenational definition of an MMF is identical tothe ECB definition.

In the Czech Republic, MMFs are identifiedand included in the provisional List of MFIsbut will only be included in the money-creating sector of money and bankingstatistics as from 2004. The value of totalfunds collected by MMFs is approximately 4%of the total bank deposits of the residentmoney holding sector (this share has beenrising constantly over the last two years).The national definition of MMFs should befully harmonised with the ECB definition inthe Czech legal system as from 2004. In themeantime, MMFs have started to harmonisetheir statutes with the ECB definition.

A legal definition of an MMF has not yet beenimplemented in Estonia. For statisticalpurposes, i.e. for the compilation of theprovisional List of MFIs in the AccessionCountries, the NCB has analysed a numberof mutual investment funds in order to selectthe ones that correspond to the ECBdefinition of an MMF. Data on the selectedMMFs are, however, not yet included in thecalculation of monetary aggregates.

Along the same lines, the five MMFs operatingin Malta are also not yet included in theprocess of compiling money and bankingstatistics, but have been included in theprovisional List of MFIs in the AccessionCountries.

Currently no MMFs have been identified inCyprus. However, in the context of theongoing co-operation between the CBC andthe Securities and Exchange Commission, thelatter will inform the CBC whenever it issuesa licence to an MMF.

At present no MMFs have been identified inBulgaria, Lithuania, Latvia, Slovenia, Slovakia andRomania.


Statistical balance sheets of monetary institutions

ECB requirements. ECB Regulation ECB/2001/13 (as amended) requires MFI balance sheetstatistics to be collected with the followingbreakdown by instrument: on the liabilities side,currency in circulation / deposits / debt securities/ money market fund units and shares / capital& reserves / remaining liabilities. The instrumentbreakdown on the asset side is very similaralthough a different terminology is used, resultingin the following categories: cash / loans /securities other than shares / shares & otherequity / fixed assets / remaining assets. Thisbreakdown is broadly consistent with the ESA95. A further breakdown by counterpart sector(ESA 95-consistent), maturity (at 1 and 2 years)or period of notice (at 3 months and – optionally– 2 years notice) and currency (euro / other) isrequired in respect of liability items in order tocalculate monetary aggregates. Variousbreakdowns are also required in respect of assetitems.

The statistical balance sheets of the money-issuing sector in the Accession Countriesgenerally follow the basic categorisationrequired for the purposes of compiling theconsolidated balance sheet of the MFI sector.In most cases, there is a sufficiently high levelof detail available by instrument, maturity andcounterpart sector to compile data consistentwith the breakdowns required in ECB/2001/13. In some cases, the national requirementseven go beyond what is required by the ECB(e.g. the Czech Republic). As the statisticalbalance sheets reflect national financialmarket conditions and are adapted to meetspecific national requirements, there are ofcourse a number of breakdowns andcategories that still differ from thoseidentified in ECB/2001/13. However,countries where this is the case are, ingeneral, planning to require breakdownsconsistent with ECB/2001/13 from reporting

agents (cf. Poland and Slovenia, for example,as from the end of 2003 and 2004,respectively).

A vital issue is the breakdown of depositliability items vis-à-vis the (potential) moneyholding sector by original maturity. Originalmaturity is a concept used by almost allAccession Countries. Until recently, thenotable exception was Cyprus, but most banksno longer use residual maturity, with theremaining banks expected to adopt originalmaturity, upon implementation of RegulationECB/2001/13. Examples of the originalmaturity cut-off points used are as follows:Bulgaria (at 2 years), Czech Republic (at 3months and 1, 2, 4 and 5 years), Estonia (at 1,2, 3 and 6 months and 1, 2, 3, 5 and 10years), Hungary (at 1 and 2 years), Latvia (at 6months and 1, 2 and 5 years), Malta (at 3 and6 months and 1, 2, 3, 4 and 5 years), Romania(simply ‘short-term’ and ‘long-term’), Poland(at 1, 3 and 6 months and 1 and 2 years),Slovakia (at 1, 3, 6, 9 months and 1, 2, 3, 4, 5and over 5 years) and Slovenia (at 1, 3 and 6months and 1 and 2 years).

The currency breakdown is also important.The currency breakdown of liabilities isgenerally restricted to the separateidentification of balances denominated in localcurrency and those in all foreign currenciescombined (except for deposits in Malta,which are broken down into variousdenominations). Balances denominated ineuro are usually not separately identified. Theexceptions are the Czech Republic, Slovakiaand Hungary (where a split between domestic/ euro / other foreign currency has alreadybeen introduced), Estonia and Latvia (whichhave introduced a breakdown by individualcurrency – including the euro – for the mainbalance sheet items).


8 A distribution by sector of actual holders based on data from theCentral Depository of Bulgaria is planned for the future.

9 However, due to their full transferability, it is not possible tohave an accurate breakdown of the current holders.

Sector allocation of holdings of negotiable instruments

ECB requirements. ECB Regulation ECB/2001/13does not require reporting institutions to identify theactual holders of their issues of negotiableinstruments (except MFI holdings), in view of thedifficulties in tracking their trade on secondarymarkets. However, in the compilation of euro areamonetary aggregates, an adjustment (for theholdings by non-residents) is made to debt securitieswith a maturity of up to two years. This adjustmentis made using aggregated information on holdersprovided by NCBs (where available) and security-by-security information provided by the two majorinternational securities settlement systems. A similaradjustment, using memo item data supplied byNCBs, was until recently made to deduct non-resident holdings of money market fund shares/units from M3 in the published monetarystatistics. However, ECB Regulation ECB/2002/8 of21 November 2002, amending ECB/2001/13,requires MFIs (and OFIs, when acting in the contextof financial activities involving MMF shares/units) asfrom May 2003 to provide NCBs with necessarydata on the residency breakdown of holders ofMMF shares/units.

In most Accession Countries (e.g. Estonia,Latvia, Lithuania, Malta, Slovenia), nationalbanknotes and coins (in all cases issued bythe NCB and by the government,respectively) are the only “transferableinstruments” included in monetaryaggregates. The amount held by the public is

usually determined as the difference betweenbanknotes and coins issued and those held bythe monetary institutions. Further allocationof banknotes and coins among sectors is notmade. Therefore, national notes and coinsheld by non-residents are usually consideredas being held by residents and are included inthe monetary aggregates. The circulation ofbanknotes denominated in other currencies(euro, US dollar) is not measured.

Other types of transferable instruments areincluded in the monetary aggregates in anumber of Accession Countries. These maycover certificates of deposit, commercialpaper and bank bearer bonds. Usually a fullsector breakdown of their holders cannot bederived. At best, a breakdown by the sectorof the first holder is made, such as for debtsecurities issued in Bulgaria8 or certificates ofdeposits in Romania9. In Cyprus, debt securitiesissued by domestic banks and traded on theCyprus Stock Exchange are mainlydistinguished into those held by providentfunds, legal and natural persons. In the CzechRepublic, data on all securities issued by bankshave been collected. However, a sectorbreakdown by current holder is not availablefor some types of securities. Finally, the Bankof Latvia, in collaboration with the LatvianCentral Depository, plans to start collectingdata on holders of securities in 2003.

Compilation of flow statistics

ECB requirements. The ECB publishes a widerange of euro area statistics in the ECB MonthlyBulletin and on its website, both as amountsoutstanding and as flows. These flow statisticsallow monetary analysis to focus on the actualfinancial transactions between the MFI sectorand the other economic sectors. For this purpose,the ECB removes purely statistical phenomenafrom stock data (i.e. non-transactions) which donot imply a transfer of financing between sectors.The framework for the derivation of euro areamoney and banking flow statistics consists ofadjusting the difference between stocks at the

end of the current and the previous end-monthsfor the non-transactions that have occurredduring this period. There are three types of non-transactions:

• Reclassifications and other adjustments (e.g.changes in the composition of the statisticalreporting population, changes in structure,


changes in the sector classification of MFIcounterparties, other changes arising from thereclassification of assets and liabilities,corrections of reporting errors), as reportedby the NCBs to the ECB according to ECBGuideline ECB/2003/210;

• Exchange rate changes (changes in the valueof assets and liabilities denominated in aforeign currency due to a change in theexchange rate of the euro vis-à-vis foreigncurrencies) – the ECB calculates a “standardadjustment” using quarterly data reported tothe ECB under ECB/2001/13; and

• Price revaluations (e.g. changes in the valuationof negotiable instruments caused by a changein their price – except the effect of exchangerate changes) and loan write-offs/write-downs.MFIs provide the ECB with data on revaluationadjustments according to ECB/2001/13.

Only a limited number of AccessionCountries have already started preparing (orare further improving) flow statistics usingthe methodologies set by the ECB:

• During 2003, a new data collection systemfor flows statistics will be implemented inEstonia. Data on non-financial transactions(divided into reclassifications, otheradjustments and price revaluation changes)will be collected directly from reportingagents; all the necessary breakdownsneeded to compile ECB flows statisticsshould be available.

• Hungary eliminates from the differences instocks the effects of write-off/write-downsreported by credit institutions and theeffects of exchange rate changes. Themethodology of calculating flows is underrevision because it is not uniform acrossversions of published statistics. As from2003, credit institutions will be able tosubmit all tables relating to the breakdownof flows requested in ECB/2001/13.

• The Czech Republic completed in 2002 thepreparatory work for the data collectionand compilation of flow statistics derived

from the MFI balance sheet stock statisticsin compliance with ECB/2001/13. Data willinitially be collected in a testing regimeand the full changeover to the standardreporting regime is envisaged for mid-2003.The collection of flow data from MMFs incompliance with ECB/2001/13 is, however,not yet under consideration.

• Poland is finalising the statisticalpreparations necessary to compile flowstatistics as far as possible in accordancewith the requirements set out in ECB/2001/13.

• In Lithuania, a new data collection systemfor flows statistics is being developed. Thissystem should cover data on pricerevaluations and loan write-offs/write-downs, as well as on reclassifications andother adjustments collected directly fromreporting agents. The new reportingreturns and instructions in line with theECB regulatory framework, which will beaddressed to credit institutions subject tominimum reserves, will in principle beadopted in 2003.

The remaining Accession Countries in generalonly produce flow data for analyticalpurposes, although some of them havealready indicated plans to adopt the ECBmethodology in the near future:

• Bulgaria also performs some statisticaladjustments of data (changes inclassification, write-offs, etc.), but foranalytical purposes only (these data arenot part of the published official monetarystatistics).

• Malta and Slovenia have indicated thatcurrently flow statistics are not compiled,although major breaks in published dataare usually identified and explained. Malta

10 Guideline of the ECB concerning certain statistical reportingrequirements of the ECB and the procedures for reporting byNCBs of statistical information in the field of money and bankingstatistics (ECB/2003/2).


has, however, indicated plans to compileflow statistics as from mid-2003.

• In Slovakia, the methodological aspects ofdata collection will be under preparationduring the first half of 2003.

• In the case of Latvia, the data is intended forthe NCB’s own use only and not forpublication. In order to obtain true flows formonetary analysis purposes, this countryadjusts the main items of the creditinstitutions’ aggregated balance sheet forvaluation effects arising from changes in theexchange rates of the national currencyagainst foreign currencies. Where changesoccur due to reclassification or changes inthe reporting population, the stocks of datacan also be adjusted according to thecharacteristics of the time series. In caseswhere adjustments are difficult, they are notmade for past periods. In 2003, Latvia plans

to remove effects arising from changes in theprices of securities and write-offsand write-downs of loans from statisticaldata.

• In Cyprus, during the process of monthlymonitoring of banks’ balance sheets,certain changes due to reclassifications,revaluations and write-offs/write-downsare identified and used for internal analysis.As far as reclassifications are concerned,stocks of data for past periods are adjustedaccordingly if the need arises. The ECB’srequirements for the derivation of flowstatistics will be fulfilled in the context ofthe implementation of Regulation ECB/2001/13. The first harmonised flowstatistics are scheduled to be compiledupon accession to the EU.

Only Romania has not indicated any plans toimprove and/or start compiling flow data.

11 For internal purposes, multiplicative models of TRAMO-SEATSare also used.

Seasonal adjustment of series

ECB practice. Besides the publication of series onnon-seasonally adjusted monetary aggregates(both as levels outstanding and flows), the ECBalso publishes seasonally adjusted levels and flowsof these aggregates using X-12-ARIMA11. Theseasonally adjusted series comprise M1, M2-M1,M2, M3-M2, M3 and “Loans to other euro arearesidents (excluding government)” (for furtherdetails on these seasonally adjusted series, seethe technical notes to Table 2.4 in the ECBMonthly Bulletin and the ECB publication“Seasonal adjustment of monetary aggregatesand Consumer Price Indices (HICP) for the euroarea”. August 2000).

Almost all Accession Countries performsome type of seasonal adjustment of data,although sometimes only for analyticalpurposes and, therefore, not intended forpublication. The only countries not usingtechniques for the seasonal adjustment ofdata are Romania and Estonia.

• Hungary intends to start publishing seasonallyadjusted data for monetary aggregates at the

latest in June 2003. The seasonal adjustmentwill be carried out using the TRAMO/SEATSsoftware package.

• Data in Bulgaria are seasonally adjusted foranalytical purposes only and do not formpart of the officially published monetarystatistics.

• Cyprus publishes (on an annual basis only)seasonally adjusted growth rates for thefollowing series (using the X-11 method ofthe Bureau of the Census, WashingtonDC): currency in circulation, demanddeposits, primary liquidity, quasi-money,total liquidity and claims on the privatesector.

• The Czech Republic seasonally adjustsreserve money and credit issuance data inits banking statistics. However, theseadjusted time series data are not published


regularly, except for the increment in thenational monetary aggregate M2 and theincrements in adjusted credits in inflationreports. The adjustment procedure coversseasonal factors, which are calculated asaverage relative deviations from the series,smoothed by the centred average method.These factors are checked once every twoyears and, in the event of significantchanges, are corrected. Seasonaladjustment is applied for analyticalpurposes. The current method was chosenbecause of its simplicity. More complexmethods – X-12-ARIMA and TRAMO/SEATS – have been tested with similarresults. The regular official publication ofseasonally adjusted data is underpreparation.

• Latvia seasonally adjusts monetaryaggregates (M1, M2D and M2X inaccordance with the national definitions)using the automated software packagesTRAMO/SEATS for WINDOWS andDEMETRA. Since time series are too short,seasonally adjusted time series are notpublished, but are used internally for thepurpose of analysis.

• In Lithuania, officially published data onmonetary aggregates and theircounterparts are not seasonally adjusted.The possibility of official publication isunder investigation.

• In Malta, published data are not seasonallyadjusted, but occasionally seasonally

adjusted series (using Census-X11) areused in the graphical illustration of certainmonetary statistics.

• Poland has been publishing seasonallyadjusted figures since December 1999 forthe following series: monetary aggregatesM0, M1 and M3, claims of commercialbanks on total domestic sectors,households and non-financial corporations,liabilities of commercial banks to totaldomestic sectors, households and non-financial corporations. Seasonally adjustedtime series are calculated with the SASsystem using the X-11 method of seasonalcorrelation and decomposition.

• The seasonal adjustment of time seriesfrom the relational database using TRAMO/SEATS has been automated in Slovenia sincethe beginning of 2001. Seasonally adjustedseries on national monetary aggregates arepublished in monthly bulletin charts.

• Slovakia has started producing seasonallyadjusted time series of currency incirculation and overnight deposits, atpresent for internal use only. Owing tothe insufficient length of existing timeseries, a multiplicative seasonaldecomposition method was applied foreach time series, separating them intotrend-cycle, seasonal, and randomcomponents. Regular publishing and theuse of a higher-quality tool (TRAMO/SEATS or X-12-ARIMA) are underpreparation for 2003.


Bulgaria


Bulgaria

List of abbreviations

BISERA Banking Integrated System for Electronic Transfer

b.o.p. balance of payments

BGN Bulgarian leva

BNB Bulgarian National Bank

ECB European Central Bank

ESA 95 European System of Accounts 1995

EUR euro

GDDS General Data Dissemination System

IMF International Monetary Fund

n.a. data are not available

n.c. data have not been collected

NSI National Statistical Institute

OMFIs other monetary financial institutions

RINGS Real-time Interbank Gross Settlement System

SDDS Special Data Dissemination Standard

SNA 1993 System of National Accounts 1993

USD US dollar

VPN Virtual Private Network


Bulgaria



1.1.1 Organisation chart of the nationalcentral bank

The main governance body of the BulgarianNational Bank (BNB) is the Managing Board,consisting of a Governor, three DeputyGovernors and three other members. Thereare three main departments in the BNB -Issue, Banking, and Banking Supervision. Themain function of the Issue Department is tomaintain the full foreign exchange reservecoverage of the total amount of the BNB’smonetary liabilities by taking the necessaryactions to effectively manage the Bank’sinternational foreign exchange assets. Shoulda systemic risk emerge that may affect thewhole banking system, the BankingDepartment assumes the functions of acreditor of last resort under the conditionsset forth in the BNB Law. The BankingSupervision Department supervises thebanking system.

See Annex 1.

1.1.2 Organisation of the statistical workat the national central bank

The statistical functions of the BNB areconcentrated in the Statistics Directorate,which is part of the Banking Department.

The Statistics Directorate consists of theMoney and Banking Statistics Division, theBalance of Payments and External DebtDivision, and the General Economic Statisticsand Publications Division. Money and bankingstatistics, as well as interest rates statistics,are compiled by the Money and BankingStatistics Division, which as of January 2003consists of the Monetary Statistics, InterestRates Statistics and Methodology Sections.

See Annex 2.


The legal framework for the BNB isprincipally provided by:

• the Law on the Bulgarian National Bank(June 1997, as amended and supplementedin 1998, 1999, 2001 and 2002);

• the Law on Banks (June 1997, as amendedand supplemented in 1998, 1999, 2000,2001 and 2002).

Certain issues concerning the activities of theBNB are also covered by:

• the Law on Bank Deposit Guarantees(April 1998, as amended and supplementedin 1998, 1999 and 2001);

• the Non-performing Loans InformationLaw (October 1997);

• the Foreign Exchange Law (September1999, amended 2002).

Pursuant to the BNB Law, the BNB issuessecondary legislation (regulations) concerningthe norms and requirements regulating theoperation of the central bank and thecommercial banks. The entire legalframework for the banking sector is availableon the BNB’s website (http://www.bnb.bg), inBulgarian and English.


1.3.1 The role of the national central bank

1.3.1.1 Introduction

By law, the BNB is the central bank of theRepublic of Bulgaria and is responsible onlyto the National Assembly (Parliament). Itsmain goal is to contribute to the maintenanceof the stability of the national currency andto assist in the establishment and functioningof efficient payment mechanisms. The BNB


Bulgaria

has the exclusive right to issue banknotesand coins in the country. It also has aregulatory and supervisory role with regardto other banks’ activities, and thus helps toensure the stability of the banking system andto protect depositors’ interests.

1.3.1.2 General responsibilities of the nationalcentral bank

The main function of the monetary regime isto support a fixed exchange rate under acurrency board arrangement. The initialreserve currency was the Deutsche Mark,but this was replaced by the euro (EUR) on1 January 1999.

The BNB is the official state depository. Thebank may not extend credit in any formwhatsoever to the state or to any state agency,except credit against purchases of specialdrawing rights from the IMF. The BNB is,moreover, not allowed to extend credit tobanks, except to cover liquidity risks that mayaffect the stability of the banking system. Suchcredit may be extended solely to the amount ofthe lev equivalent of the gross foreign exchangereserves that exceeds the total amount ofmonetary liabilities of the BNB.

The BNB is not functionally bound by anyinstructions or directives issued by theCouncil of Ministers or by any other statebodies. The Managing Board of the BNB ispersonally independent: the Governor andthe three Deputy Governors of the Bank areelected by the National Assembly, while theother three members are appointed by thePresident, all of them holding office for sixyears. The financial independence of the BNBis derived from the provision that theNational Assembly has to adopt its annualbudget and the National Audit Chamber hasto examine the reports on budget outlays.

The BNB specifies the reserve requirementsfor banks, how these are calculated as well asthe terms of and procedures for interestpayments on these reserves. In order toperform its functions successfully, the BNB

collects statistical data. The Bank is alsoauthorised to compile the country’s balanceof payments (b.o.p.). For this purpose, allgovernment bodies and municipal authorities,as well as legal and physical persons, have toprovide the requested information.

Some issues concerning relations between theBNB and commercial banks are addressed inthe Law on Banks. These refer to the grantingand revoking of permits (licences) to conductbank operations, as well as to bankingsupervision and bankruptcy proceedings. TheLaw on Foreign Exchange contains provisionson the collection of data for the b.o.p., as wellas on the reporting of financial obligations tonon-residents by both legal and physical persons.

1.3.2 Macroeconomic statistics: mainresponsibilities of domestic publicauthorities

1.3.2.1 Main responsibilities of the national centralbank in the field of macroeconomicstatistics

The BNB’s statistical activity includes thecollection and compilation of data in thefollowing areas: money and banking, reserverequirement management, b.o.p, prudentialsupervision and fiscal services.

The reserve requirement statistics are compiledby the Banking Policy Directorate, which is alsoresponsible for monitoring the overallmanagement of the reserve requirements. Thesources of data for this are the banks’ weeklyreports on liabilities subject to reserverequirements, together with the weeklystatistical data for monetary statistics purposes.

The b.o.p. is prepared by the Balance ofPayments and External Debt Division of theStatistics Directorate. B.o.p. data are collectedfrom commercial banks, the customs offices(trade statistics), the National Statistical Institute(NSI), the Central Depository, the Ministry ofFinance, the Agency for Foreign Investmentand enterprises as well as legal and physicalpersons.


Bulgaria

Table 1

Statistical areas: Money and banking statistics

Bank balance sheet statistics/ Interest rate statistics Securitymonetary aggregates issues statistics

and counterparts

Collected data Monthly and weekly balancesheets with additional breakdownby sector.

Timeliness: Weekly data arereceived on the second workingday following the reporting week,while monthly statistics arereceived 15 days after the end ofthe reporting month.

Weekly reports of newly contracted overdrafts andloans, broken down by currency (BGN, EUR and USdollar (USD)), institutional sector (enterprises andhouseholds) and maturity (up to one year and over oneyear). Monthly reports of stocks and newly receivedrepos and deposits. The latter are broken down bycurrency (BGN, EUR, USD and other currencies),institutional sector (enterprises and households) andmaturity (overnight; up to one, three, six, twelvemonths; over twelve months; and the introduction ofnew maturity bands of up to 2 years and over 2 yearsas of January 2003).

Daily information on the money market interest rates(on extended deposits and repos on the interbankmarket), broken down by currency (BGN, EUR andUSD) and maturity (up to three days, up to one week,up to one month, up to 3 months, up to 6 months, up to12 months, and over 12 months). Information aboutexact maturities for 1 month, 3 months, 6 months and1 year repos/deposits is collected and regularly sent tothe ECB.

All interest rates are weighted average for all reportingentities.

1. Data on the primary andsecondary governmentsecurities markets issuedby the central government.These are data on Treasurybills (3-month, 6-month,and 1-year) and Treasurybonds (2, 3, 5, 7, and 10-year). The data areobtained from the BNBComputerised Book-entrySystem for Registration ofand Trade in GovernmentSecurities. This registersall transactions ingovernment securities onthe primary and secondarymarkets, and the principaland interest payments onmaturing governmentsecurities (securitiesissued by the Governmentof the Republic ofBulgaria are in book-entryform). Data ongovernment securities arereported in the commercialbanks’ balance sheets atmarket or close to marketvalue.

1.3.2.3 Overview of statistical data collection and compilation

Data on prudential banking are collected bythe Banking Supervision Department. Themain source is the banks’ balance sheets(monthly and annual), as well as additionalreports related to specific regulations onprudential supervision.

Information relating to the fiscal services theBNB provides to the Government, asrepresented by the Ministry of Finance, iscollected by the Fiscal Services Department.The main data sources are the ComputerisedBook-entry System for Registration of andTrade in Government Securities, and theComputerised System for Registration,Servicing and Management of GovernmentLiabilities to Foreign Creditors.

1.3.2.2 Main responsibilities of other publicauthorities, and co-operation with thenational central bank

Responsibility for the preparation ofmacroeconomic statistics is shared betweenthe NSI, the Ministry of Finance and the BNB.The NSI is responsible for statistics relatingto the real economy, including the financialaccounts, while the Ministry of Finance isresponsible for the fiscal sector, and the BNBis responsible for the monetary and externalsectors. The preparation of a methodologyfor the compilation of the financial accountsis under way. There is an exchange of databetween the three institutions, as well as co-operation on methodological issues.


Bulgaria

Table 1 (continued)

Statistical areas: Reserve base Financial accounts Balance of payments Prudential supervision

Collected data In preparation. Necessarydata are collected from NSI,BNB and Ministry ofFinance.

Collecting agents BNB, Banking PolicyDirectorate

NSI BNB, Statistics Directorate BNB, Banking SupervisionDepartment

Liabilities of commercialbanks subject to reserverequirements.

Timeliness: weekly, twodays after the end of thereporting week.

Reporting forms recordingtransactions between thecompiling economy and therest of the world.Data are collected from thecommercial banks, customsoffices, NSI, CentralDepository, Ministry ofFinance, ForeignInvestment Agency andothers. Timeliness:monthly, as prescribed bythe BNB Regulations.

Monthly balance sheets ofthe banks, profit and losscall reports on theperformance on indicatorsper individual regulation forsupervision purposes, andadditional quarterly reports.

Timeliness: 15 days afterthe end of the reportingperiod

BNB, Statistics Directorate BNB, Statistics Directorate,BNB, Banking Policy Directorate

BNB, Fiscal ServicesDepartment,BNB, StatisticsDirectorate

Users

Description



and counterparts

Timeliness: Daily data are received after the close of themarket on the same business day. Weekly data arereceived on the second working day following thereporting week, and 6 days after the end of the reportingmonth for monthly statistics.

2. Data on debt securitiesissued by OMFIs, reportedin the commercial banks’balance sheets at nominalvalue. Data are alsoreceived by the CentralDepository for statisticaldistribution into sectors.

BNB, banks and financial sector,Ministry of Finance, othergovernment institutions, NSI,IMF, ECB, Eurostat, otherinternational institutions, thegeneral public.

BNB, banks and financial sector, Ministry of Finance,other government institutions, NSI, IMF, ECB,Eurostat, other international institutions, the generalpublic.

BNB, banks andfinancial sector,Ministry of Finance,other governmentinstitutions, NSI, IMF,ECB, Eurostat, otherinternationalinstitutions, the generalpublic.

Data from the reporting agentsare collected electronically usingthe existing Interbank electronicnetwork system (Virtual PrivateNetwork – VPN).

Data from the reporting agents are collectedelectronically using the existing Interbank electronicnetwork system (Virtual Private Network – VPN) andin paper form.

Data are receivedelectronically or, as anexception, by telex.

Table 1 (continued)

Collecting agents


Bulgaria



2.1.1 National legal aspects

The legal framework for the monetarystatistics is provided by the Law on the BNB,the Law on Banks and the Accounting Law.Although there are no explicit provisionscovering monetary statistics, the collectionof monetary data from the banks is coveredby Article 4 of the Law on the BNB andArticle 55 of the Law on Banks.

The former stipulates that the BNB can demandany information from the commercial banks,while the latter requires banks to submit reportsto the central bank in a set format, with specificcontents and in accordance with a deadline laiddown by the central bank.

Data received from banks are used exclusivelyfor statistical purposes. Raw data are treatedconfidentially, and there are specificprovisions to this effect in the BNB Law.

Monetary statistics are based on the statisticalreporting forms of the BNB and of thecommercial banks, in accordance with themethodological instructions provided by theBNB and the Accounting Law.

2.1.2 Statistical standards followed

Monetary statistics are collected andcompiled according to international statisticalstandards and, to a great extent, comply withthe rules of international financial statistics.The most important standards include:

• The European System of Accounts 1995(ESA 95) and System of National Accounts(SNA 1993);

• Regulation of the ECB No.13 dated 22November 2001 (ECB/2001/13), and theMoney and Banking Statistics CompilationGuide, ECB, 1998;

• Money and Banking Statistics SectorManual: Guidance for the StatisticalClassification of Customers, ECB, 1998;

• Monetary and Financial Statistics Manual,IMF, 2000.

The accounting rules followed by commercialbanks and the BNB can be found in theAccountancy Law (November 2001) and theInternational Accounting Standards (theUniform National Accounting Standards,which are consistent with internationalstandards, were valid until the end of 2002;after this point, the International AccountingStandards came into force).

Table 1 (continued)


Data are collectedelectronically and in paperform.

Users BNB Financial accounts are stillbeing prepared.

Description Data are collectedelectronically and in paperform.

BNB, banks and financialsector, Ministry of Finance,other governmentinstitutions, NSI, IMF,ECB, Eurostat, otherinternational institutions,the general public.

Data are collectedelectronically and in paperform.

BNB, banks and financialsector, Ministry of Finance,other governmentinstitutions, NSI, IMF,ECB, Eurostat, otherinternational institutions,the general public.

Data from the reportingagents are collectedelectronically using theexisting Interbank electronicnetwork system (VirtualPrivate Network – VPN)


Bulgaria

Bulgaria is a member of the General DataDissemination System (GDDS) developedby the IMF and also, in the field of monetaryand banking statistics, adheres to therequirements of the Special DataDissemination Standard (SDDS).


2.2.1 Statistical definitions: economicterritory and residency principles

The economic territory of the countryconsists of the geographic territoryadministrated by the government; within thisterritory, persons, goods and capital circulatefreely. The economic territory includes theairspace, territorial waters, and continentalshelf lying in international waters over whichthe country has executive rights. It alsoincludes territorial enclaves (i.e. geographicterritories situated elsewhere in theworld and used, under international treatiesor agreements between States, by generalgovernment agencies of the country(embassies, consulates, military bases,scientific bases, etc.)), and any free zones.

Residents of the country are defined asinstitutional units that have their centre ofeconomic interest within the economic territoryof the country; their residence is in the sameterritory and they are engaged in economicactivities on a significant scale on this territoryfor an extended period – six months or more.

Branches of resident banks abroad with a centreof economic interest in the territory of othercountries are treated as non-residents. Branchesof foreign banks licensed to operate in thecountry are classified as residents and areincluded in the money-creating sector.

Borderline cases of residency:

1) Persons from embassies, consulates, militarybases and scientific bases are classified asresidents of their native countries (for example,bank transactions with foreign embassies aretreated as relationships with non-residents).

2) The following cases are classified asresident units:

• Tourists – people who leave the countryfor a period of less than six months forbusiness or private travel purposes;

• Seasonal workers – people who leave thecountry for several months, but less thansix months, to work in another country;

• Border workers – people who cross thefrontier regularly (daily, weekly) to workin a neighbouring country;

• Crew members of ships, aircraft and othermobile equipment, operating partly orwholly outside the territory of the country;

• Bulgarian students in foreign countries, nomatter how long they study abroad.

The concept of residency is consistent with theESA 95, the IMF Balance of Payments Manual,5th edition, and the Bulgarian Foreign ExchangeLaw.

2.2.2 Sectors in monetary statistics

To a great extent the ESA 95 standards ofsector classification for institutional units areapplied. The sectoral breakdown applied inmonetary statistics is by residency (resident andnon-resident). The resident sector is thendivided into the banking, government and non-government sectors.

A. Resident sector

a) Banking sector:

• BNB (central bank) (S121);

• commercial banks (OMFIs) (S122).

b) General government sector:

• central government (S1311);


Bulgaria

Non-financial private corporations Non-financial private corporations are under the control of privatenational and foreign institutional entities, i.e. these entities own 50%or more of their capital by holding either more than half of the votingstock (shares), or controlling more than half of the stockholders orshareholders. Private corporations are market producers, whose mainactivity is the production of goods and non-financial services.

Households The households sub-sector covers individuals or groups of individuals asconsumers (possibly also as entrepreneurs) producing market goods andnon-financial and financial services (market producers). This sector alsoincludes individuals or groups of individuals as the producers of goodsand non-financial services for their own exclusive final use. The sectoralso includes any sole proprietorships and partnerships withoutindependent legal status that are market producers.

Money-neutral sector Central government The central government sub-sector includes all administrativedepartments and other central units of the State whose competenceextends normally over the whole economic territory, except for theadministration of social security funds. This sector also includes non-profit institutions that are controlled and mainly financed by centralgovernment, and whose competence extends over the whole economicterritory.

Money-holding sector Local government The local government sub-sector includes types of publicadministration whose competence only extends locally within theeconomic territory, apart from local agencies of social securityfunds.

Sector classification Sectors Definitions

Money-creating sector BNB The central bank is a financial corporation whose principal functions areto issue currency and maintain its internal and external value, to hold allor part of the international reserves of the country, and to be the lenderof last resort and official depository of the State.

Commercial banks (OMFIs) The other monetary financial institutions (OMFIs) sub-sector consistsof all financial corporations (except those classified in the central banksub-sector) that are principally engaged in financial intermediation andwhose business it is to receive deposits and/or close substitutes fordeposits from institutional units other than OMFIs, and, on their ownaccount, to grant loans and/or to make investments in securities.

Money-holding sector Non-bank financial institutions The other financial intermediaries sub-sector consists of:• All financial corporations that are principally engaged in

financial intermediation by incurring liabilities in forms other thancurrency, deposits and/or close substitutes for deposits frominstitutional units other than MFIs, or insurance technical reserves.The sub-sector includes leasing and factoring corporations, mutualfunds, import/export corporations, etc.

• All financial corporations that are principally engaged inauxiliary financial activities, i.e. corporations that engage in activitiesclosely related to financial intermediation, but are not financialintermediaries themselves. This sub-sector includes the stockexchange, exchange bureaus, consultants, brokers, etc.

• All financial corporations that are principally engaged in financialintermediation as the consequence of risk pooling.

Non-financial public corporations Non-financial public corporations are institutional entities under thecontrol of government sector entities (i.e. 50% or more of their capital(voting stock, shares) is owned by the latter). They directly or indirectlydecide corporate policy and/or appoint directors. Public corporations aremarket producers, whose main activity is the production of goods andnon-financial services

Table 2


Bulgaria


Money-neutral sector Local government This sector includes non-profit institutions that arecontrolled and mainly financed by local government, and whosecompetence is restricted to the economic territory of the respectivelocal government.

Social security funds The social security funds sub-sector includes all central and localinstitutional units whose principal activity is to provide social benefitsand which fulfil each of the following two criteria: 1) by law or byregulation, certain population groups are obliged to participate in thescheme or to pay contributions; 2) general government is responsiblefor the management of the institution in respect of the settlement orapproval of contributions and benefits, independently from its role assupervisory body or employer.

Non-resident sector Banks The rest of the world sector covers all economic territory outsideBulgaria, and all non-resident legal or physical persons reporting

General government transactions and having receivables, liabilities, or other economicrelations with resident sectors. International and supranational

Other non-residents organisations are also included here.

Table 2 (continued)

Gen

eral

gov

ernm

ent

Res

t of

the

wor

ld

• local government (S1313);

• social security funds (S1314).

c) Non-government sector:

• non-financial public enterprises(S11001);

• non-financial private enterprises(S11002 + S11003);

• non-bank financial institutions (S123+ S124 + S125);

• households (S14).

B. Rest of the world (non-residents)

• banking sector;

• general government sector;

• other non-residents.

2.2.2.1 Definition and classification of sectors inmonetary statistics

The banking sector includes the central bankand all commercial banks licensed by the BNB(including branches of foreign banks). Thegeneral government sector includes central

government, local government and socialsecurity funds. The non-government sectorconsists of non-financial enterprises (publicand private), households and non-bankfinancial institutions. The last categoryincludes financial intermediaries, insurancecompanies, pension funds and othercompanies which are part of the financialsector but are not classified as OMFIs. Thenon-bank financial institution sector is notbroken down into sub-sectors.

2.2.2.2 Comparison between the sectors of thenational economy and the ESA 95

The sectors are compared in Table 3.

It should be noted that non-profit institutionsare considered part of the sector that theyserve (mainly private enterprises andhouseholds). From 2004 onwards, there willbe a separate sector, namely S15 – Non-profit Institutions Serving Households.

Non-bank financial institutions are not brokendown into sub-sectors. From 2004 onwards,they will be divided between Other financialintermediaries, with the exception of insurancecompanies and pension funds (S123), Financialauxiliaries (S124) and Insurance companies andpension funds (S125).


Bulgaria

Money-holdingsector

S22

Third countries andinternationalorganisations

Table 3

National ECBsector National sectors Sectors in the ESA 95 sector

classification classification

Money-creating sector

S121

Central bank

S121

Central bank


S122

Commercial banks (OMFIs)

S122

Other monetaryfinancial institutions

S12

Financial corporations

Money-holdingsector

S123, S124, S125

Non-bank financial institutions

S123

Other financialintermediaries, exceptinsurance corporations

and pension funds

Money-holdingsector

S124

Financial auxiliaries

S11

Non-financial public and private corporations

S11

Non-financial corporations

S14

Households

S14

Households

n.c. S15

Non-profit institutions serving households

Money-neutralsector

S13

General government

S1311

Central government

S1311

Central government S13

General government

Money-neutralsector

n.a. S1312

State government

Money-holdingsector

S1313

Local government

S1313

Local government

S1314

Social security funds

S1314


Non-residentsector

Banks

General government

Other

S211

EUcountries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212

Institutionsof the EU

S125

Insurance corporationsand pension funds

The non-resident sector is not broken downinto sub-sectors. From 2004 onwards, itwill be divided between the European Union(S21) and Third countries and internationalorganisations (S22).

These changes will ensure the fullimplementation of the ESA 95.


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2.3 Monetary institutions

2.3.1 Definition of a credit institution(bank) and types of credit institution

According to national legislation (the Law onBanks), a written permit (license) issued bythe BNB is required to perform bankingoperations. Only banks licensed by the BNBcan publicly accept money as deposits anduse these funds to extend loans or to investfor their own account and at their own risk.Thus the banking sector in the countryconsists of the central bank together with allthe commercial banks. A bank may alsoconduct the following commercial transactions:

1. purchase of bills of exchange andpromissory notes;

2. foreign currency and precious metalstransactions;

3. acceptance of valuables on deposit;

4. securities transactions, also includingtransactions under Article 54, para.1 of theLaw on Public Offering of Securities, whichconsist of:

• securities transactions, also includingtransactions in securities for their ownaccount or for the account of a third party,and intermediation for entering into suchtransactions;

• underwriting of securities issues;

• management of individual portfolios ofsecurities and/or monies, with theexception of investment fund and pensionfund portfolios;

• holding of securities and monies of clientsat a depository institution (custodianactivity);

5. guaranty transactions;

6. handling payments on account and clearingchecking accounts of other persons;

7. purchase of accounts receivable for thedelivery of goods or services rendered, andthe assumption of risks related to thecollection of these claims (factoring);

8. financial leasing;

9. issuance and management of bank cards;

10. transactions in financial futures andoptions or instruments related to exchangerates and interest rates;

11. provision of bank safes;

12. equity acquisition and management;

13. consultations rendered to companies asto their capital structure, industrial strategyand related issues, as well as consultationsand services on how to transform companiesand acquire enterprises;

14. consultations on portfolio investments;

15. other transactions as specified by theBulgarian National Bank.

The institutions included in the money andbanking statistics coverage are the centralbank and the commercial banks (34 in total)licensed by the BNB.

28 of the commercial banks have a full licenceto do business in Bulgaria and abroad, whilethe remaining six are branches of foreignbanks.

A specific feature of Bulgarian monetarystatistics is that an account of commercialbanks in a procedure of insolvency is kept,which does not form part of the officialmonetary statistics. Data on such banks areshown in separate tables. The purpose of thisis to provide a picture of the dynamics atwork within the banking system, namely whena bank with a revoked license and in aprocedure of insolvency is excluded from thescope of the official statistics andsubsequently drops out of the statisticalsurvey. As of December 2002, there were


Bulgaria

four commercial banks subject to aninsolvency procedure.

2.3.2 Definition of other monetaryinstitutions

There are no other monetary institutions(money market funds, etc.) that meet thecriteria for a monetary financial institutionwithin the meaning of ECB Regulation ECB/2001/13, namely whose shares/units are interms of liquidity, close substitutes fordeposits and/or the structure of whoseinvestment portfolios would meet therequirements of the above regulation.

2.3.3 Central government units withdeposit liabilities included inmeasures of money

There are no deposits of government unitsincluded in the monetary aggregates. PostOffices in the country do not accept deposits.

Payments). The RINGS real-time interbankgross settlement system is expected to startoperating from the beginning of 2003.

The main types of deposit products includeovernight deposits (up to 1 day and demanddeposits), with agreed maturity (time)deposits, and deposits redeemable at notice(savings and call deposits). Interest ondeposits is accrued and paid according to thecontract, and depends on the amount,maturity and the terms of the deposit. Whena time deposit is withdrawn without advancenotice and before maturity, agreed interest isnot paid. Banks accept deposits in nationaland foreign currencies, mainly in euro andUS dollars. The interest rates on thesedeposits are close to international market rates.

The main types of credit products offeredby commercial banks include overdrafts,short-term and long-term loans (consumerloans, housing loans, other householdand syndicated loans, credit lines, revolvingcredit commitments and financial leasingfor corporations) in national and foreigncurrencies (euro, US dollars) with fixed orfloating interest rates. Banks issue guaranteesand act as intermediaries in payments, tradein government and corporate securities, andeffect other transactions provided for inArticle 1 of the Law on Banks. Banks offerround-the-clock services through ATMs andPOS terminals, phone banking (home, officebanking), WAP banking, Internet banking andPC banking. They also issue debt securities(primarily mortgage-backed bonds), as wellas credit and debit cards, and enter into reposwith clients.


2.5.1 Description of the main balancesheet items

The monetary statistics are compiled fromspecially designed report forms submitted bythe reporting entities to the BNB on a weeklyand monthly basis. The report forms for

Institutions Number ofinstitutions

BNB 1

Credit institutions 34

Commercial banks 34

Other monetary institutions 0

Total 35

Table 4As at end-December 2002

2.4 Banking business: generaldeposits/other products

The commercial banks licensed by the BNBare allowed to conduct business as explicitlydefined in Article 1 of the Law on Banks (andexplained in section 2.3.1 of this chapter).Settlements between banks are carried outvia the Banking Integrated System forElectronic Transfer (BISERA), which is runand monitored by the BNB. All operatingbanks are obliged to join the system (asspecified by BNB Regulation No. 3 on


Bulgaria

statistical purposes are prepared on the basisof detailed accounting information.

Monetary statistics are compiled on a 100%statistical coverage basis.

The main items in the assets of the reportingentities are:

• Claims on non-residents (representing thebanks’ foreign assets);

• Claims on the general government sector(including claims on the centralgovernment, local government and socialsecurity funds);

• Claims on the non-government sector(including banks’ claims on public andprivate non-financial corporations, non-bank financial institutions and households);

• Other assets (containing claims arisingfrom interbank or intrabank transactions,the value of fixed assets such as buildings,vehicles, etc., as well as other expenditureswhich cannot be classified in any of theabove-mentioned categories).

The main items in the liabilities of banks are:

• Deposits of the non-government sectordeposits;

• Debt securities issued;

• Credits;

• Foreign liabilities;

• Government sector deposits;

• Capital and reserves;

• Other liabilities (include those liabilitiesarising from interbank or intrabanktransactions and other non-classifiedassets).

2.5.2 Breakdown of the main balancesheet items by instrument/maturity,counterpart and currency

The dynamics of monetary statistics arecaptured by a monetary survey, two analyticalreports (one on the BNB, the other oncommercial banks), and by several additionaltables containing more detailed information.Data are broken down by sector, indicator,instrument and maturity. The asset indicatorsare grouped by sectors and instruments, andthe liability indicators by instruments anddegree of callability. All indicators are brokendown by currency (national and foreigncurrency), and presented according to theiroriginal maturity (for deposits, loans,securities other than shares). As of January2004, balances denominated in euro andUS dollars will be identified.

At the same time, monthly sector reports forthe BNB and for the commercial banks arecompiled and published. These are statictables presenting the respective asset andliability indicators in view of identifying thesector that balance sheet items belong to.

Assets side

Foreign assets are broken down byinstruments (cash, deposits, credits, securitiesother than shares, shares and other equity)and by sector (banks, government and othernon-residents).

Claims on government are classified by sector(central government, local government andsocial security funds) and instrument(securities, credits and others). Governmentsecurities are broken down by maturity(short-term – up to 12 months; medium-term– up to five years; long-term – over fiveyears) and by type (issued under Regulation 5of the BNB and MoF, Eurobonds, Brady bondsand others).

Claims on the non-government sectorare divided into four sectors: public andprivate non-financial corporations, non-bank


Bulgaria

financial institutions, and households. Theyare presented by instrument, as follows:loans (short-term and long-term – the latterwith the following maturity breakdown asof January 2004: over 1 and up to 2 years,over 2 and up to 5 years, and over 5 years),securities other than shares, shares and otherequity.

Liabilities side

The deposits of the non-government sectorare broken down by instrument as follows:overnight (up to 1-day and demand depositsas of January 2003) with agreed maturity(time deposits with the introduction of newmaturity bands of up to 2 years and over 2years as of January 2003); redeemable atnotice (primarily savings deposits); andblocked deposits. Savings deposits onlyconsist of household deposits. All otherdeposits are broken down by sector intodeposits of non-financial public corporations,private corporations, households, and non-bank financial institutions. A new instrument– the repo – is to be introduced as of January2003.

Loans and debt securities issued areseparated into independent positions andpresented by creditor sector and maturity(with the introduction of new maturity bandsof up to 2 years and over 2 years as ofJanuary 2003).

Box 1

M1 includes:

– currency outside banks;

– demand deposits.

M2 includes:

– M1;

– time deposits;

– savings deposits in BGN;

– deposits in foreign currencies.

M3 includes:

– M2;

– debt securities issued;

– credits;

– restricted deposits.

Foreign liabilities are broken down byinstrument (deposits, credits, debt securitiesissued and others).

Deposits of the government sector arebroken down by government sub-sector(central government, local government andsocial securities funds), and by type ofdeposit.

A new maturity breakdown on deposits willbe applied as of January 2004, as follows:

• for deposits with agreed maturity: up to1 month, over 1 month up to 3 months,over 3 and up to 6 months, over 6 monthsup to 1 year, over 1 and up to 2 years, andover 2 years.

• for deposits redeemable at notice: up to 3months’ notice, over 3 months’ notice upto 2 years, and over 2 years.


2.6.1 Definition of money and instrumentbreakdown of monetary aggregates

According to the national definition, themonetary aggregate M1 (narrow money)includes the most liquid monetaryinstruments used as a means of payment(currency outside banks and demand depositsin domestic currency).


Bulgaria

Quasi-money and the monetary aggregate M1form the monetary aggregate M2. Quasi-money consists of time deposits, savingsdeposits in BGN and foreign currencydeposits. Deposits in foreign currency aredivided into demand, time and savingsdeposits.

The least liquid monetary instruments arethe debt securities issued, received creditsand restricted deposits. They are in domesticand foreign currencies and, together with themonetary aggregate M2, form the broadestmonetary aggregate M3, which is known asthe money supply (broad money).

Monetary aggregates have been compiledaccording to both national and ECB definitionsin the weekly statistical information since 2002;from 2003, they will be compiled in the monthlymonetary survey as well.

2.6.2 Sectoral allocation of holdings ofnegotiable instruments

The transferable instruments included in themonetary aggregates are cash (banknotes andcoins) and debt securities issued. Due to thenature of cash, money outside banks cannot

be reported on a current basis by holders.However, for the debt securities issued, abreakdown by sector of the first holder ismade. The BNB also plans to produce adistribution by sector of the actual holders ofsecurities based on data from the CentralDepository of Bulgaria.


The major counterparts of money in themonetary survey are net foreign assets andnet domestic assets. The latter are brokendown into the following principal categories:

• domestic credit (which includes claims onthe government sector and claims on thenon-government sector);

• capital and reserves;

• other items (net).

These are also broken down by currency,maturity and sectors/sub-sectors, whereappropriate.

Box 2 indicates how the counterparts ofmoney are classified.

Box 2

Net foreign assets

Foreign assets (gross) with breakdown by instrument, sector and currency. These include the international

foreign exchange reserves of the country, and other foreign assets of the BNB and the commercial banks.

Foreign liabilities (gross) with breakdown by instrument, sector and currency. These disclose the liabilities of

the BNB and commercial banks to the external world.

Net domestic assets

Domestic credit

• Claims on the general government sector

– Claims (net) on central government

– Claims (gross) on local government and social security funds

• Claims on the non-government sector, broken down by sub-sector into maturity and currency

Capital and reserves

Other items (net) include net interbank and intrabank balances, fixed assets, and unclassified assets.


Bulgaria

2.8 Reserve money

Reserve money (the monetary base) includescurrency outside banks and commercial banks’funds (bank reserves). The latter include thedeposits of commercial banks with the BNB aswell as the cash in their vaults.

Deposits with the BNB are in both domesticand foreign currency, and include therequired minimum reserves (currently set at8%) of banks as well as their excess reserves,mainly settlement accounts for banks anddemand deposits for other institutions(according to the Law on the BNB, the centralbank may accept deposits from non-bankinstitutions according to terms set by itsManaging Board, as stipulated in Article 39).


2.9.1 Powers to collect statistics andcollecting agents

The legal framework for the central bank tocollect statistics from the commercial banksis provided by the Law on the BNB (Article4) and the Law on Banks (Articles 55 and 62).

Article 62 of the Law on Banks specifies that, inrelation to its supervisory function, the centralbank may require commercial banks to provideaccounting or other documents, as well asadditional information on their activities.

The BNB is obliged to treat all collected datain strict confidentiality (Article 4 of the Lawon the BNB).

2.9.2 Identification of the reportingpopulation (reporting coverage)

2.9.3 Reporting schemes

Monetary statistics are collected on a weeklyand monthly basis from all commercial banks.Weekly and monthly reports share the sameformat and content on a full balance sheetbasis.

Weekly statistics data are received by theend of the second business day of the weekfollowing the reporting one, and monthlystatistics by the 15th of the month followingthe reporting month.

Data are provided electronically via the VPNof the BNB and the commercial banks.

Monetary statistics include two levels of datacompilation.

On the first level, available data received fromindividual reporting entities are aggregated inthe analytical reports, which containexhaustive balance sheet data on the BNBand the commercial banks. The aim of theanalytical reporting is to provide dataclassified in accordance with the principles of

Reporting institutions Total balance sheet

Number % (of the total % (of the totalcategory) balance sheet of

all institutions)

BNB 1 100 45.1

Credit institutions 34 100 54.9

Commercial banks with a licence to operate in Bulgariaand abroad 28 100 52.6

Branches of foreign banks (licensed to operate in Bulgariaand abroad) 6 100 2.3

Other monetary institutions 0 - 0

Total 35 - 100



Bulgaria

residency, sectorisation, and belonging to aparticular type of instrument, in a formatsuitable for the compilation of the monetarysurvey.

On the second level, data from the analyticalreporting are consolidated in the form of amonetary survey. The monetary survey is themain form of monetary statistics, and contains avariety of important indicators necessary formacroeconomic analysis. It illustrates themechanism by which the monetary base ismultiplied in the aggregate money supplyservicing transactions in the national economy.It is structured in such a way that facilitates theanalysis of broad money and its sources.

The accounting rules followed by thecommercial banks and the BNB are set forthin the Accountancy Law (November 2001)and the accounting standards (the UnifiedAccounting Standards, which are consistentwith the IAS, and are valid for all commercialbanks until the end of 2002, after which pointthe IAS will be applied). There are noexceptions to the general standards, and theprocedures do not in practice differ from theestablished ones.

2.9.4 Special reporting procedures for thenational central bank

The procedures for data collection andcompilation are the same as those used bythe commercial banks. Weekly and monthlyreports share the same format and contenton a full balance sheet basis.

Frequency and timeliness are the same as forthe commercial banks – one week later forthe weekly data, and one month later for themonthly data. In addition, according to Article49 of the Law on the BNB, the central bankpublishes the balance sheet of the IssueDepartment (the currency board) on a weeklyand monthly basis, and that of the BankingDepartment on a monthly basis (on thefollowing working day).

According to Article 28, paragraph 6 of theLaw on the BNB, the stock of monetary goldis valued at DEM 500 per troy ounce (since1 January 2002, at 500 BGN per troy ounce),or at the market value, if lower. There areno other exceptions to the general accountingand revaluation rules.


2.10.1 Basis of calculation

Stock data refer to the end of the reportingperiod: Friday or the last working day of theweek for the weekly data, and the lastworking day of the month for the monthlydata.

2.10.2 Revisions

The procedures related to revisions of datain previous publications aim to detect andeliminate any errors. Technical control isexercised on a current basis when data arereceived at the BNB, and the data from eachbank are verified. The information iscorrected at the BNB after the correct datahave been electronically received.

Revisions of already published data arecarried out if:

• the data turn out to be erroneous;

• an accounting or statistical standard hassince changed.

When a revision is made, the revised dataare marked with a special sign (“R”), and anexplanation is provided. When a statisticalstandard has since changed, the revision iseffected retroactively to the beginning of theevent or change, where possible.

Revisions apply to both the weekly andmonthly data. Since weekly data appear


Bulgaria

before the monthly summaries, which arebased on the same range of accounting data,revisions are first announced in the former.

Preliminary data are only published in theweekly statistics. When the revision refersto a past period, it is marked with an “R”,together with an appropriate explanation ofthe reasons for, and contents of, the revision.When the revision refers to several indicatorsand many periods, a special appendix to theedition is prepared.

2.10.3 Derivation of flow statistics

Flow statistics are presently not compiled incompliance with ECB/2001/13 requirements,but preparations are underway for theirintroduction.

The BNB conducts some statistical dataadjustments (changes in classification, write-offs, etc.), but for analytical purposes only:these data are not part of the publishedofficial monetary statistics, and are only usedfor information purposes, as per below:

Changes in the sector classification of MFIcounterparties, other changes arising fromthe reclassification of assets and liabilities, write-offs – some information concerning the abovereclassifications is gathered directly frombalance sheets; ad hoc investigations areundertaken where necessary.

Changes in the composition of the statisticalreporting population and changes in structure –balance sheets of OMFIs which have joinedor left the reporting population, as well asinformation on mergers and acquisitions, areavailable for internal use.

Exchange rate changes – statistical adjustmentsof data on the impact of exchange ratechanges during the reference period are onlymade for informational and analyticalpurposes.

2.10.4 Seasonal adjustment

Seasonal adjustment of data is performed foranalytical purposes only and does not formpart of the officially published monetarystatistics.

2.11 Publications

2.11.1 First release of data(including the medium)

Weekly information is published five businessdays after the end of the reporting period.A leaflet entitled “Weekly StatisticalInformation” is sent simultaneously to allusers subscribing to the publication by e-mailor in paper form. Monthly information ispublished no later than 30 days after theend of the respective reporting period.The Monetary Statistics leaflet is sentsimultaneously to all users subscribing to thepublication by e-mail or in paper form.Since June 1999, the BNB website http://www.bnb.bg has become a key source ofinformation, as it contains these statistics.The weekly and monthly data are available onthe BNB website, http://www.bnb.bg. Whileviewing data on the website, users can selecta random period of time and choose theirown indicators. There is the possibility ofasking questions directly in relation to themonetary and interest-rate statistics via thee-mail address and telephone numberspublished on the website.

Government authorities and agencies –ministries, departments, etc. – are not givenprivileged or insider access to statistical data.

2.11.2 Key weekly/monthly publications

Monthly monetary statistics data are alsopublished in the BNB Monthly InformationBulletin, which is issued up to 45 days afterthe end of the accounting period. Thepublication is available in paper form, or canbe obtained from the BNB website, http://www.bnb.bg.


Bulgaria

2.11.3 Other statistical publications

Monthly monetary statistics are also includedin the BNB annual and semi-annual reports.The annual report for the reporting year is

usually published at the beginning of May ofthe following year, and the semi-annual reportlater in November. These publications areavailable in paper form, or can be obtainedfrom the BNB website, http://www.bnb.bg.

3 Contacts at the Bulgarian National Bank

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

Statistics Directorate, Monetary and BankingStatistics Division

1, Alexander Battenberg Square, 1000 Sofia,Bulgaria

Phone: + 359 2 9145 1587; Fax: + 359 2 98024 25; e-mail: [email protected]


Bulgaria

Annex 1

Organisation chart of the Bulgarian National bank (BNB)

MANAGING BOARD OF THE BNB

ORGANI ATIONAL STRUCTURE OF THE BNB(as of July 2002)

DEPUTY GOVERNORBANKING SUPERVISION DEPARTMENT

Emiliya Milanova

DEPUTY GOVERNORBANKING DEPARTMENT

Bojidar Kabaktchiev

INTERNATIONAL RELATIONS AND EUROPEANINTEGRATION DIRECTORATE

Luchia Christova

FISCAL SERVICESDEPARTMENT

Nikolina Micheva

GOVERNMENT AND GOVERNMENTGUARANTEED DEBTS DEPOSITORY

DIRECTORATEAlexander Ivanov

SUPERVISION POLICY AND METHODOLOGYDIRECTORATE

Rumen Simeonov

BANK POLICY DIRECTORATEPavlina Anachkova

ECONOMIC RESEARCH AND PROJECTIONSDIRECTORATEVictor Yotzov

STATISTICS DIRECTORATEZdravko Balyozov

GENERAL ACCOUNTING DIRECTORATEVanya Paunovska - chief accountant

SPECIAL SUPERVISION DIRECTORATEActing Director Maria Grigorova

OFF-SITE SUPERVISION AND ANALYSISDIRECTORATE

Stoyan Manolov

ON-SITE SUPERVISION DIRECTORATETatyana Petrova

PROJECTIONS AND MANAGEMENT OFSTATE BUDGET CASH FLOWS

DIRECTORATERoumyana Kirova

GOVERNORSvetoslav Gavriiski

INFORMATICS AND COMMUNICATIONSDIRECTORATE

Vladimir Bogoev

PUBLICATIONS AND GENERALSECRETARIAT DIRECTORATE

Jana Kraicheva

SECURITY AND AUTOTRANSPORTDIRECTORATE

Stefan Stefanov

CAPITAL INVESTMENT AND MAINTENANCEDIRECTORATE

Ventzeslav Velinov

LEGAL DIRECTORATEDimitar Ananiev - chief legal advisor

CHIEF AUDITOR - Rayka OntzovaINTERNAL AUDIT DIRECTORATE

DEPUTY GOVERNORISSUE DEPARTMENT

Martin Zaimov

CASH OPERATIONS DIRECTORATERoumian Tchobanov - chief cashier

TREASURY DIRECTORATEPlamen Budzakov

RISK ANALYSIS AND CONTROL DIRECTORATEIglika Andreevska

GENERAL SECRETARYVelisar Stoilov

Chief Accounting Methodologist

SUPERVISION ADMINISTRATIONDIRECTORATETihomir Timnev

Protocol and Press Office DivisionGeorgi Atanassoff

HUMAN RESOURCES DIRECTORATEMilena Balcheva

Mobili ation and Crisis ManagementDivision

Sasho Ivanov

Governor’s Office

General Secretary’s Office

Deputy Governor’s OfficePetar Andronov - chief directorDeputy Governor’s Office

Deputy Governor’s OfficeSvetlozar Karaneshev - chief director

s

S


Bulgaria

Statistics Directorate

Statistics

Directorate

Annex 2

Money and Banking

Statistics Division

Balance of Payments and

External Debt Division

General Economic Statistics

and Publication Division

Monetary statistics

Interest rates statistics

Methodology and reporting

Analysis and forecasting of

foreign trade and the balance of

payments

International investment

position

Methodology

Annex 2

Cyprus


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ABUs Administered banking units

ATMs Automated teller machines


BS&RD Banking Supervision and Regulation Division

CBC Central Bank of Cyprus

CCSSs co-operative credit and savings societies

CoM Council of Ministers

CSE Cyprus Stock Exchange

CYP Cyprus pound

DBs domestic banks

DMBs domestic money banks


EMI European Monetary Institute

ERD Economic Research Department

ER&SD Economic Research and Statistics Department


ESCB European System of Central Banks

EU European Union

FA financial accounts

IAS International Accounting Standards

IBCs international business companies

IBUs international banking units

ICISs international collective investment schemes

i.i.p. international investment position


MFSS Monetary and Financial Statistics Section

MMFs money market funds

MoF Ministry of Finance

MPC Monetary Policy Committee

OFIs other financial institutions

SD Statistics Department

SDR Special Drawing Rights

SSR Statistical Service of the Republic

WAP Wireless-assisted Protocol


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The organisational structure of the CentralBank of Cyprus (CBC) is currently underrevision taking into consideration Cyprus’accession to the European Union (EU) andthe participation of the CBC in the EuropeanSystem of Central Banks (ESCB). Anorganisation chart can be found in Annex I.

The organs of the CBC are the MonetaryPolicy Committee (MPC), which wasestablished under the new CBC Law, theBoard of Directors and the Governor.

– The MPC consists of the Governor andfive other members, two of whom areappointed by the Governor, and theremaining three by the Council of Ministers(CoM). The tasks of the MPC are to defineand implement monetary policy and todecide on matters pertaining to theconduct of exchange rate policy and theoperation of payment and settlementsystems.

– The Board of Directors consists of theGovernor and five directors appointed bythe CoM. The main tasks of the Board areto supervise the administration of the Bankand to define and implement the policy ofthe Bank in all matters concerning theBank, save those that fall within theresponsibility of the MPC.

– The Governor is appointed by thePresident of the Republic for a renewableterm of office of five years. The Governor,as the chief executive officer of the Bank,is entrusted with carrying out the Bank’spolicy, as well as managing and controllingthe Bank’s business, acting in connectionwith the conduct of the Bank’s business.

According to the new organisational structureof the CBC, the division formerly known as

the Economic Research and ManagementServices Division (ER&MSD) became theEconomic Research and Statistics Division(ER&SD), while the IT Department and thePersonnel and Administration Section, whichwere formerly part of the ER&MSD, now alsoreport directly to the Governor.

In addition, the Internal Audit Department,which was previously under the BankingSupervision and Regulation Division (BS&RD),became independent and is now directlyunder the Governor.


For the organisation chart of the StatisticsDepartment (SD), see the Organisation Chartof the CBC in Annex I.

As mentioned in section 1.1.1 above, animportant development was the set-up of theSD within the Economic Research and StatisticsDivision. Most of the statistical work of theCBC is now performed by the SD, whichcomprises the Balance of Payments andEuropean Issues Section and the Monetary andFinancial Statistics Section (MFSS).

Statistical data are also produced by theBanking Supervision and Regulation Division(BS&RD), including reserve base statisticsand prudential supervision statistics. Theremaining divisions of the CBC may collectstatistical data which, however, serve mainlyas input for the operations of the SD.


The legal framework governing the activitiesof the CBC comprises the following laws:

• Banking Law (No. 66 (I) of 1997), asamended.


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This law sets the legal framework withinwhich banking business may be conductedand, to a large extent, reflects the principlesand rules of European Union (EU) bankingdirectives.

By virtue of the power vested in it by theBanking Law, the CBC has so far issued thefollowing directives and regulations to banks:

Date issued Relevant Directives/Regulations issued to domestic banks (DBs)section of the and IBUs/ ABUsBanking Law

18 November 1997 28 Notice to banks regarding the relationship between the CBC andexternal auditors of banks

6 February 1998 23 Directive for the computation of prudential liquidity

26 January 1999 22 Directive for the computation of the capital base of banks

26 January 1999 21 Directive for the computation of banks’ capital adequacy ratios

6 December 1999 24 Directive for the layout and the contents of banks’ annual accounts

3 March 2000 34 Regulations for the establishment and operation of the DepositProtection Scheme

30 November 2000 41 Directive on cross-border credit transfers issued for the purpose ofimplementing EU Directive No.97/5/EC which entered into force on1 April 2001, with the exception of certain provisions which willbecome effective at a later stage, to be determined by the CBC, but notlater than the date of Cyprus’ accession to the EU

18 May 2001 41 Directive on foreign currency positions and exposures

24 May 2001 41 Directive on the framework for the evaluation of internal controlsystems

15 April 2002 41 Directive on the employment of funds derived from foreign currencydeposit liabilities

25 September 2002 11 Directive on the monitoring and control of credit facilities(large exposures)

9 December 2002 21&22 Directive on capital adequacy (CAD)

22 March 2001 22 Directive on the computation of the capital base of IBUs/ ABUsincorporated in Cyprus

22 March 2001 21 Directive on the computation of the capital adequacy ratio of IBUs/ABUs incorporated in Cyprus

2 April 2001 12 Circular on investment in immovable property to IBUs/ ABUs

3 April 2001 13 Circular on investment in the share capital of other companiesto IBUs/ ABUs

4 April 2001 11 Directive on the monitoring and control of credit facilities to individualborrowers or bank directors and their connected persons to IBUs/ ABUs

12 April 2001 41 Directive on cross-border credit transfers to IBUs/ ABUs

2 November 2001 23 Directive on the computation of prudential liquidity to all IBUs/ ABUs

2 November 2001 25 Directive on the layout and contents of monthly balance sheets andanalytical profit and loss account returns submitted to the CBC byIBUs/ABUs

2 November 2001 41 Directive on the monitoring of foreign currency exposures of the IBUs /ABUs incorporated in Cyprus

2 November 2001 41 Directive on the framework for the evaluation of internal controlsystems to IBUs/ ABUs

9 December 2002 21&22 Directive on capital adequacy (CAD) to IBUs/ ABUs


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The Banking Law, as well as the directivesand regulations issued under this Law, maybe found on the CBC’s website (http://www.centralbank.gov.cy)

• The Central Bank of Cyprus Law No.138(I)of 2002 (CBC Law).

The CBC Law replaced the Central Bank ofCyprus Law (No. 48 of 1963), as amendedwith the date of entry into force being 5 July2002. The CBC Law, which provides forcentral bank independence, is compatible withArticles 105 to 124 of the Treaty establishingthe European Community and the Statute ofthe European System of Central Banks(ESCB). This Law can be found on the CBC’swebsite (http://www.centralbank.gov.cy).

According to section 72 of the new statute,any regulations, directives or otheradministrative acts issued under the lawsrepealed by this law and which were in forceimmediately prior to the enactment of thislaw, shall continue to be in force until theyare repealed or replaced, to the extent thatthey are not incompatible with the provisionsof this law.

The main regulations issued on the basis ofthe old CBC Laws and which continue to bein force are as follows:

The CBC has been designated under this lawas the competent authority responsible forthe recognition, regulation and supervisionof international collective investment schemes(ICISs), which can be either of limited orunlimited duration. The CBC is also thesupervisory authority for the managers andtrustees of ICISs. This law may be found onthe internet at www.centralbank.gov.cy

• Prevention and Suppression of MoneyLaundering Activities Law (No. 61(I) of1996), as amended

The main purpose of this law is to define andcriminalize the laundering of the proceedsfrom all serious criminal offences and toprovide for the confiscation of such proceeds,thus aiming to deprive criminals of the profitsfrom their crimes.

The CBC is designated as the supervisoryauthority for all banks licensed to conductbanking business in or from within Cyprus. Inthis regard, the CBC has been assigned theduty of assessing the compliance of all bankswith the special provisions of the law inrespect of their business.

• The Exchange Control Law (Chapter 199)enacted in 1952, as amended by Law No.53/1972

Date Relevant Directive/Regulationsection of theold CBC Law

2 March 1973 and 14 Designation of financial institutions regulations19 September 1986

29 December 1995 37 Maintenance of minimum reserves regulations

• Interest Rate Liberalisation Law (No. 160(I) of 1999)

This law entered into force on 1 January2001, and provides mainly for the repeal ofthe Interest Law of 1977, prescribing a legalceiling of 9.0% per annum on interest rates.

• International Collective InvestmentSchemes Law (No. 47(I) of 1999), asamended

Under this law, the permission of the CBC,acting on behalf of the Minister of Finance, isrequired for payments by residents to non-residents, as well as for the registration ofdomestic securities in the name of non-residents and certain other internationaltransactions. The CBC has delegated powersto DBs in Cyprus, designated as authoriseddealers in exchange, to handle payments forseveral purposes. As part of theharmonisation measures with the EU acquis


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communautaire, Cyprus is in the process ofabolishing exchange controls. To this effect,the Exchange Control Law is scheduled to beabolished by accession.




The CBC was established in 1963 as anautonomous institution in accordance withthe relevant provisions of the Cyprusconstitution and the CBC Law of 1963.

Since 5 July 2002, the Bank has been governedby CBC Law No.138(I) of 2002. This newCBC law ensures the independence of theBank as well as compatibility with the relevantprovisions of the Treaty establishing theEuropean Community and the Statute of theESCB. The Bank is expected to join theESCB simultaneously with the accession ofCyprus to the EU, and all necessary measuresare being taken in this direction. At thesame time, the pertinent constitutionalprovisions have been amended so as toensure central bank independence asprescribed by the EU acquis.

The new CBC Law ensures the institutionaland financial independence of the Bank, aswell as the personal independence of theGovernor and the members of its decision-making bodies, in accordance with therelevant EU acquis. Furthermore, the lawcontains an explicit provision prohibiting thefinancing of the public sector, in any form, bythe Bank.


The primary objective of the Bank, accordingto section 5 of the new CBC Law, shall be toensure price stability. Without prejudice tothis primary objective, the Bank shall supportthe general economic policy of the government.

The main tasks of the Bank, as stated inSection 6 of the new CBC Law, are thefollowing:

(a) the formulation and implementation ofmonetary policy (including credit policy);

(b) the conduct of exchange rate policy,within the framework of the exchangerate policy formulated by the CoM afterthe opinion expressed by the Bank;

(c) the holding and management of officialinternational reserves;

(d) the supervision of banks;

(e) the promotion, regulation and oversightof the smooth operation of payments andsettlement systems;

(f) the performance of the tasks of bankerand financial agent to the government;and

(g) participation as a member of internationalmonetary and economic organisations.

The role of the CBC vis-à-vis theGovernment and other public bodies, asprovided in the new CBC Law, is as follows:

Section 7 refers to the independence of theBank. It states that when carrying out thetasks conferred upon them, under this Law,neither the Bank nor any member of itsdecision-making bodies shall seek or takeinstructions from the Government or anyother body.

Part VII refers to relations of the Bank withthe Government. Under section 49, overdraftfacilities or any other type of credit facilitywith the Bank in favour of the Government,local authorities, public corporations orpublic undertakings shall be prohibited, asshall any purchase directly from them by theBank of debt instruments at their issue.


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In view of Cyprus’ accession to the EU and theparticipation of the CBC in the ESCB, theorganisational structure of the CBC is currentlyunder review. In this context and given thegrowing importance of statistics and the needfor harmonised statistics, the SD was createdunder the ER&SD.

The ERD is mainly responsible for theformulation of monetary policy and for itsimplementation following approval by theMPC. Moreover, it is responsible formonitoring and analysing exchange ratedevelopments. In addition, it produces amonthly report for the MPC as well as themain publications of the CBC. In thiscapacity, the ERD collects and analysesmacroeconomic statistical data produced bythe SD of the CBC, such as monetary,interest rate and balance of paymentsstatistics, as well as by the Statistical Serviceof the Republic (SSR) and the Ministryof Finance (MoF), such as government financestatistics, national accounts data, inflation andunemployment data.

The SD of the CBC is responsible for theharmonisation of the various statistics withinits scope of competence with therequirements of the European Central Bank(ECB), Eurostat and the InternationalMonetary Fund (IMF), and for theircompilation and dissemination to bothinternal and external users. It also has a co-ordinating role in matters related to Cyprus’saccession to the EU.

The SD comprises the following sections:

Monetary and Financial Statistics section:

(i) Money and banking statistics• MFI balance sheet statistics/ monetary

aggregates and counterparts• Interest rate statistics• Securities issues statistics

(ii) Financial accounts (FA) in collaborationwith the SSR

Balance of payments (b.o.p.) and European issuessection:

(i) Balance of payments statistics and i.i.p.

(ii) European issues

In addition to the above, the BankingSupervision and Regulation Division iscurrently responsible for the followingstatistics:

(i) reserve base statistics

(ii) prudential supervision statistics coveringboth DBs and IBUs/ABUs

1.3.2.2 Main responsibilities of other publicauthorities in the field of macroeconomicstatistics and co-operation with the nationalcentral bank

The SSR has the primary responsibility ofproducing macroeconomic statistics coveringmost areas of the economy, with theexception of b.o.p, i.i.p., money and banking,reserve base and prudential supervisionstatistics, which fall under the responsibilityof the CBC. The areas covered are as follows:

– National accounts and short-termeconomic indicators

– Financial accounts (FA), in collaborationwith the CBC

– Demography, health and educationstatistics


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– Wages, consumer prices and labour forcestatistics

– Agriculture

– Foreign trade

– Manufacturing, construction, energy andthe environment

– Research and development

– Transport and services statistics

– Social statistics.

The Ministry of Finance (MoF) is currentlyresponsible for the collection and compilationof government finance statistics.

The Cyprus Stock Exchange (CSE) maintainsdata on securities listed on the stockexchange, such as bid/ask prices, marketprices, volume of transactions and marketcapitalisation.

The CBC is in close co-operation with theabove mentioned authorities, either withinits competence as a user or as a compiler ofstatistics, as follows:

• Financial Accounts:A working committee consisting ofrepresentatives of the SSR, the MoF and theCBC meets regularly in order to co-ordinatethe set-up and compilation of FA. In thiscontext, the MFSS of the CBC has assumedthe obligation of providing the SSR with anynecessary information within its competence.At the moment the SSR is working, in co-operation with the MFSS, on the productionof a preliminary set of FA data in the contextof the ‘Pilot Project on Government FinanceStatistics and Financial Accounts’.

Moreover, the SSR is currently producing aSector Manual in accordance with the ESA

95, which will be used both for theimplementation of the ECB statisticalrequirements as well as for the compilationof FA; this is now in at advanced stage.

• Balance of PaymentsThe SSR provides the b.o.p. section on amonthly basis with foreign trade statisticsbased on customs data, and data on tourism.The latter include data on receipts fromtourism as well as the number of touristarrivals and departures derived from frontiersurveys. The b.o.p. section also receives datafrom the Cyprus Stock Exchange (CSE)concerning non-residents’ investments.Moreover, this section communicates withthe Government, in particular the MoF,concerning the Government’s foreignborrowing and foreign grants, as well as withthe Department of Land and Surveysconcerning investment by non-residents inreal estate in Cyprus. In addition, the b.o.p.section co-operates with other financialsupervisory authorities (the InsuranceCompanies Control Service, the Securitiesand Exchange Commission) in the collectionof data from companies under theirsupervision.

• Monetary PolicyThe ERD additionally collects from the above-mentioned authorities all relevant datanecessary to follow economic developmentsand formulate the Bank’s monetary policy.

• Money and Banking StatisticsThe MFSS uses data on listed securitiesproduced by the CSE when compilingsecurities issues statistics and long-terminterest rates.

1.3.2.3 Overview of statistical data collection andcompilation methods.

See Table 1.


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Table 1


Bank balance sheet statistics/ Interest rate statistics Security issues statisticsmonetary aggregates

and counterparts

Collected data a) Treasury bills with 13-week and52-week maturity offered to thepublic by auction. Data includedates of issuance and maturity,interest rates resulting from theauction (average, lowest, highest)and amounts announced, tenderedfor and auctioned, distinguishingbetween competitive and non-competitive bids. Secondary marketdata (only for 52-week Treasurybills) include: number and volumeof transactions, bid/ ask and marketprices. Frequency and timeliness:released on the day of thetransaction.

b) Development stocks with two, five,ten and fifteen years’ maturityoffered to the public by auction.Data include dates of issuanceand maturity, interest rates resultingfrom the auction (average, lowest,highest) and amounts announced,tendered for and auctioned,distinguishing between competitiveand non-competitive bids.Secondary market data include:number and volume of transactions,bid/ask and market prices.Frequency and timeliness:released on the day of thetransaction.

c) Development stocks with three-yearmaturity sold only to privateindividuals. Data include dates ofissuance and maturity, interest ratesand nominal amount.Frequency: published monthly.

d) 5-year savings certificates issued onan ongoing basis and sold to naturalpersons. Data on issuance andmaturity date, amount of issue, thecompound interest rate.Frequencyand timeliness: on an ad hoc basis,depending on their intended use.

e) 7-year savings bonds sold to naturalpersons with nominal values ofCYP 5 and CYP 10 are entered inregular draws one month after issue.Data include date of issue, date oforiginal maturity, and amount ofissue. Frequency and timeliness: onan ad hoc basis, depending on theirintended use.

f) Public eurobond notes in currenciesother than CYP are offered to non-

a) Bank balance sheet statistics:Submitted by all DBs.Frequency: monthly.Timeliness: within fifteen daysof the end of the referencemonth.

b) Central Bank balance sheetstatistics: Frequency: monthly.Timeliness: available on thesecond working day of thefollowing month and publishedby the end of the followingmonth.

c) Monetary aggregates andcounterparts: Data are compiledfrom the balance sheets of DBsand CBC.Frequency: monthly.Timeliness: published within 21days of the end ofthe respective month.

a) Retail bank interest rates: End-of-perioddata on the representative interest rates,as defined by banks, offered on thefollowing types of deposits in CYP:current accounts (over CYP 1,000),deposits redeemable at notice, brokendown by maturity (7 days, 3 months,1 year, over 1 year) and amount (up toCYP 5,000 and over CYP 5,000), anddeposits with an agreed maturity of 1year (up to CYP 5,000 and over CYP5,000) and over 1 year (separatereporting by product). End-of-perioddata on the minimum, maximum andrepresentative interest rates as definedby banks, charged on the followingtypes of loans in CYP: personal loans(overdrafts within the limit, overdraftsin excess of the limit, secured,unsecured), loans to enterprises(overdrafts within the limit, overdraftsin excess of the limit, secured,unsecured), housing loans (with/withoutlife insurance), credit cards. Frequency:collected and published monthly.Timeliness: submitted within 15 daysafter the end of the respective month.

b) Interest rates on liquidity providing/absorbing operations as well as amountsannounced, tendered for and allotted.Frequency and timeliness: all data arecollected and announced on the day ofthe operations.

c) Interbank interest rates: Interbank bidand offered rates for the following timebands: overnight, 1 week, 1 month,3 months, 6 months, 1 year. Interbank(actual) rates for the following timebands: overnight, 2-7 days, 2-6 months,6-12 months. Frequency and timeliness:all data are collected on a daily basisand published monthly.

d) Official Central Bank rates: short-termCBC facility (Lombard type) interestrate and overnight CBC deposit facilityinterest rate.Frequency: published monthly.


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and counterparts

Collected data

Table 1 (continued)

resident institutional investorsand are traded on internationalmarkets. Data on a security-by-security basis from the leadmanagers of each issue, includingdate of issue and original maturity,amount of issue, coupon rateand yield to maturity, bid/askand market price on the primarymarket. Frequency and timeliness:statistics may be compiled on adaily, monthly, quarterly or yearlybasis, depending on their intendeduse.

Collecting agents CBC CBC CBC, MoF

Users

Description Data for all government debt securitiesin CYP can be extracted electronicallyfrom the Register of Holdersmaintained by the CBC. For eachholder, this register includes personaldata and data for all certificates in theholder’s name (series number of theissue, certificate number, issue and duedates, amounts held or redeemed,relevant interest rate and interest paid).For Treasury bill and developmentstock auctions, the interest ratesreferring to the date of the transactionare calculated as weighted averages.When monthly averages are reported,these are simple arithmetic averages ofthe daily interest rates. In the case ofthree-year development stocks, theinterest rate is administrativelypredefined by the CBC upon issuanceof each stock. Regarding issues ofgovernment securities in foreigncurrency, information is obtained on asecurity-by-security basis from thelead managers of each issue, as andwhen required.

CBC, DBs and the widerfinancial sector, governmentdepartments, ECB, Eurostat, IMFand other internationalorganisations, credit ratingagencies, private sector/ thegeneral public.

CBC, DBs and the wider financial sector,government departments, ECB, Eurostat,IMF and other international organisations,credit rating agencies, private sector/ thegeneral public.

CBC, DBs and the wider financialsector, government departments, ECB,Eurostat, IMF and other internationalorganisations, credit rating agencies,private sector/ the general public.

Balance sheets are submitted byall DBs in paper form andprocessed electronically: anaggregate balance sheet is thencompiled. Further analysis isconducted and reports areprepared based on these raw dataaccording to the needs ofmonetary and credit policy. Datafor the CBC balance sheet aredownloaded from the Bank’sgeneral ledger and compiledelectronically. A definition of themonetary aggregates andcounterparts can be found inSections 2.6.1 and 2.7.

a) This reporting scheme was introducedin January 2001 after the enactment ofthe Interest Rate Liberalisation Law.Retail bank interest rates are submittedby 9 DBs in paper form and processedelectronically. The average of therepresentative interest rates, as definedby the 3 largest banks, is currentlypublished on a monthly basis.

b) For liquidity providing (absorbing)operations, the minimum (maximum)rate at which bids are accepted and thelowest, highest and weighted averagerate resulting in each operation arepublished every month.

c) Banks participating in the interbankmarket post their offered/bid rates onReuters; the Nicosia Interbank OfferedRate (NIBOR)/ Bid Rate (NIBID) arethen calculated. Moreover, everyparticipating bank is required to submitto the CBC on a daily basis itsplacements with other participatingbanks, giving the amount, duration andinterest rate on each transaction. Theinterbank actual rates are calculated asthe simple average of the daily weightedaverage rates on newly contracted loans,and are published every month.Moreover, the simple average of thevolume of total transactions in theinterbank market during the respectivemonth is also published.


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Table 1 (continued)

Statistical areas: Reserve base Financial accounts Balance of payments

Collected data

Collecting agents

Users

Description Data are compiled in accordance withthe IMF’s BPM5 and Eurostat’s BOPVademecum.

Statement showing the daily balancesof customer deposits in CYP heldwith DBs.

Frequency: weekly.

Timeliness: one week after thereporting date.

The SSR, in co-operation with theCBC, is preparing a preliminary set ofFA. In addition, a sector manual inaccordance with the ESA 95 is in anadvanced stage of preparation.

(a) Data on the trade account.Frequency: monthly.

(b) Data on the current account.Frequency: monthly, datacompiled quarterly.

(c) Data on the capital and financialaccounts. Frequency: monthly,data compiled quarterly.

CBC SSR, CBC, MoF CBC, SSR

CBC CBC (e.g. for monetary policypurposes), the Statistical Service ofCyprus (for the production of annualaccounts), government departments,banks and the wider financial sector,international organisations, creditrating agencies, the private sector/general public.

Submitted in paper form andprocessed on Excel worksheets.These data are used to establish thatthe minimum reserve regulations areadhered to, as well as for statisticalpurposes. The reserve base of a bankcomprises the average of totaldeposits in CYP during a fortnight (1-15 and 16-30/31 of each month). Theamount of minimum reserve to beheld by each DB with the CBC for afortnightly period is calculated byapplying the minimum reserve ratio(6.5% as from 01.01.2001) to thereserve base of the correspondingfortnight of the preceding month. Theinterest rate earned is 4% as from 13December 2002. DBs are liable topenalties in the event of failure tocomply with the minimum reserveregulations.

A working committee comprisingrepresentatives of the SSR (theagency responsible for thecompilation of FA), the MoF and theCBC has been appointed to set up andimplement this project.


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Table 1 (continued)

Collected data

Collecting agents

Users

Description

Statistical areas: Prudential supervision

(a) Review of each DB’s balance sheet and monitoring of adherence to the provisions of the Banking Law regardinglimitations on shareholdings and holdings of immovable property by banks. Computation of statistics on the marketshares of banks with regard to loans and deposits.

(b) Evaluation of foreign currency assets and liabilities with a view to ascertaining adherence to the limits provided inthe relevant directive to DBs.

(c)+ (d) Evaluation of foreign currency position and verification of adherence to the limits set in the relevant directiveto DBs.

(e) Information is provided for individuals and corporate bodies, with a distinction made between Cypriot companies,shipping companies, international business companies (IBCs) and foreign incorporated companies. The dataprovided in this return are evaluated in combination with the data contained in the return for foreign currency assetsand liabilities.

(f) Evaluation of assets and liabilities by residual maturity (organised into time bands).

(g) These data are the basis for profitability evaluation.

(h) Evaluation of capital adequacy and verification of adherence to the minimum level required (10% as from31.12.2000).

(i) Evaluation of all exposures in excess of 10% of a DB’s capital base, as well as data on all the credit facilities grantedto the DB’s directors, with a view to ascertaining adherence to the limits set in the Banking Law. In the case ofdirectors, particulars for the security held are also provided.

(j) Evaluation of immovable property with a view to ascertaining adherence to the relevant provisions of the Law.

(k) Evaluation of banks’ shareholdings and those of their subsidiaries in other companies with a view to ascertainingadherence to the relevant provisions of the Law.

a) Balance sheet of DBs (same as the one mentioned in the “Bank balance sheet statistics/monetary aggregates andcounterparts” column). Frequency: monthly. Timeliness: within 15 days of the end of the reference month.

b) Statement of foreign currency assets and liabilities. Frequency: monthly. Timeliness: within 21 days of the reportingdate.

c) Statement of foreign currency positions. Frequency: monthly. Timeliness: within 15 days of the reporting date.

d) Consolidated statement of foreign currency positions. Frequency: monthly. Timeliness: within 15 days of thereporting date.

e) Statement of deposits in foreign currencies and deposits in external accounts according to origin and depositorgroup. Frequency: quarterly. Timeliness: within one month of the reporting date.

f) Statement for the computation of prudential liquidity. Frequency: quarterly. Timeliness: within 21 days of thereporting date.

g) Analytical profit and loss account submitted by DBs for their operations in Cyprus. Frequency: half-yearly.Timeliness: the end-year return to be submitted within four months of the end of each financial year.

h) Statement on capital adequacy. Frequency: half-yearly. Timeliness: within one month of the reporting date.

i) Statement on credit facilities to large individual borrowers or bank directors and connected persons. Frequency: half-yearly. Timeliness: within one month of the reporting date.

j) Statement on the acquisition and disposal of immovable property (other than the property used for conductingbusiness). Frequency: half-yearly. Timeliness: within one month of the reporting date.

k) Statement of banks’ shareholdings and those of their subsidiaries in other companies. Frequency: annually.Timeliness: within one month of the year-end.

CBC

CBC. Some of the data are also used by the Government, the IMF, international organisations and credit rating agencies.


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2 Monetary Statistics



The CBC is authorised under section 63 ofthe new CBC Law to request that banks anddesignated financial institutions, governmentservices, public corporations, as well as anynatural person or legal entity, without beingentitled to invoke bank secrecy or any othersecrecy, should report to the Bank all thedata and information in their possessionwhich are necessary for the fulfilment of theBank’s objective and for the performance ofits tasks as laid down in sections 5 and 6,respectively, as described in 1.3.1.2.

Moreover, section 25 of the Banking Law(No.66(I) of 1997), as amended, requiresbanks to submit to the CBC a certifiedstatement of their assets and liabilities at theend of each month as well as any otherinformation that may be specified by the CBC.

2.1.2 Statistical standards

Monetary aggregates and counterparts wereinitially compiled according to theInternational Financial Statistics Methodology,and later in accordance with the IMF Guideon Money and Banking Statistics of 1984.

The balance sheets of CBC and DBs areprepared on the basis of their books, whichmust be kept in accordance with theInternational Accounting Standards (IAS). Thebanks’ balance sheets are also in compliancewith the Council Directive of 8 December1986 on the “Annual accounts andconsolidated accounts of banks and otherfinancial institutions” (86/635/EEC).

The current framework for monetarystatistics is being revised in order to complywith the Regulations and Guidelines of theECB, the Manual on Monetary and FinancialStatistics published by the IMF in 2000, and

the requirements of the Bank for InternationalSettlements.



The economic territory of the Republic ofCyprus comprises:

– the territory of the Republic of Cyprus1;

– the national airspace, territorial waters andthe continental shelf lying in internationalwaters over which the country enjoysexclusive rights;

– territorial enclaves (i.e. geographicterritories situated in the rest of the worldand used, under international treaties oragreements between States, by generalgovernment agencies of the country(embassies, consulates, military bases,scientific bases, etc.)) for all transactionsother than those relating to the ownershipof the land constituting the enclave, and ofthe buildings standing on such land at thetime of purchase;

– extraterritorial enclaves (i.e. parts of thecountry’s own geographic territory usedby general government agencies of othercountries, by the institutions of theEuropean Communities or by internationalorganisations under international treatiesor agreements between States) only inrespect of transactions relating to theownership of the land constituting theenclave, and of the buildings standing onsuch land at the time of sale;

1 Part of the territory of the Republic of Cyprus is presently underforeign military occupation. This occupied area remains part ofthe territory of the Republic. The Government of the Republic ofCyprus is, however, prevented by force majeure (i.e. the foreignmilitary occupation) from exercising de facto its powers over it.As a result of this situation, the Government is unable, for thetime being, to provide or monitor any data on the economicactivity of the said area.


Cyprus

– deposits of oil, natural gas, etc. ininternational waters outside thecontinental shelf of the country, workedby units resident in the territory as definedin the preceding subparagraphs.

The residential status of natural persons isnormally determined by reference to theplace where they live and work permanently,while that of legal entities is determined byreference not to the place of incorporationbut with reference to the place where theyare economically active.

Therefore, foreign branches of domesticbanks are considered to be non-resident unitsand their liabilities are not included in themonetary aggregates, whereas domesticbranches of foreign banks are considered tobe resident and their liabilities are includedin the monetary aggregates.

International banking units (IBUs), which aremainly branches of foreign banks or Cyprus-incorporated subsidiaries of foreign banks,

are considered as non-resident institutionsand are required to confine themselves totransactions denominated in currencies otherthan the CYP, and primarily to customersother than residents of Cyprus. For thisreason, IBUs do not at the moment formpart of the reporting population for thecompilation of monetary statistics.

However, as from January, 2002, the BPM5residency principle has been introduced forb.o.p. and international investment positionstatistical purposes. This residency definitionwill be adopted in the near future in monetarystatistics as well, in the context of the fullimplementation of the ECB statisticalrequirements.



See Table 2.


Cyprus


Money-creating sector CBC This sector corresponds to the national central bank.

DBs This sector includes all domestic banks (DBs), formerlyknown as deposit money banks (DMBs) and otherfinancial institutions (OFIs). This was the result of thereclassification of OFIs into the money-creating sector.

Money-neutral sector Consolidated Central This sector includes all state administrative departmentsgovernment accounts government and some extra-budgetary funds.

Government This sector includes various market regulatoryagencies organisations.

Social This sector includes the state-run, earnings-relatedsecurity funds social insurance scheme covering all salaried and

self-employed persons.

Money-holding sector Local authorities This sector includes municipal corporations and otherlocal authorities, such as the Improvement andDevelopment Boards.

Insurance companies, pension funds This sector includes insurance companies and pensionand internal funds and provident funds.

Public corporations This sector includes the public utilities and non-profitinstitutions that are controlled and mainly financed bythe central government. Under the ESA 95 sectorisation,some public corporations will be included in the centralgovernment sector and some in the non-financialcorporations sector.

Private residents (individuals and This sector includes resident individuals and financialcorporate bodies) and non-financial corporations not reported elsewhere.

Non-resident sector Non-resident sector This sector consists of non-resident corporate andnon-corporate persons engaged in transactions withresident institutional units or which have other economiclinks with resident units.

Table 2


Cyprus

Table 2 (continued)



Money-creating CBC S121 Money-creatingsector Central bank sector

DBs S122 S12Other monetary Financial corporationsfinancial institutions

Money-holding Private residents (individuals and S123 Money-holdingsector corporate bodies) Other financial sector

intermediaries,except insurancecorporations andpension funds

S124Financial auxiliaries

Insurance companies, pension funds S125and internal funds Insurance corporations

and pension funds

Public corporations S11Consolidated government accounts – Non-financialgovernment agencies corporations

Private residents (individuals and corporate

bodies)

S14Households

S15Non-profit institutions serving households

Money-neutral Consolidated Central S1311 S13 Money-neutralsector government accounts government Central government General government sector

Money-holding n.a. S1312 Money-holdingsector State/regional sector

government

Local authorities S1313Local government

Money-neutral Consolidated Social security S1314sector government accounts funds Social security funds

Non-resident Non-resident sector S211 S21 S2 Non-residentsector EU European Rest of the world sector

countries Union

S212Institutionsof the EU

S22Third countries andinternationalorganisations


Cyprus

2.3 Population of monetaryinstitutions

2.3.1 Definition of a credit institution(bank) and categories of creditinstitutions

In accordance with the Banking Law (No. 66(I)of 1997), as amended, “bank” (credit institution)means “a body corporate licensed to carry onbanking business under the provisions of thisLaw” and “banking business” means “businesscarried on in the Republic or abroad from withinthe Republic consisting of lending of fundsacquired from the assumption of obligations tothe public, whether in the form of deposits,securities or other evidence of debt”. This Lawprovides that a licence from the CBC is requiredfor the conduct of banking business in or fromwithin Cyprus. Such a licence, however, doesnot allow the establishment of banking businessabroad.

Credit institutions (banks) operating underthe Banking Law can be divided into thefollowing groups:

• Domestic banks (DBs)These credit institutions are licensed to carryon banking business in Cyprus or abroad fromwithin Cyprus. This group consists of banksformerly known as DMBs and OFIs. It shouldbe noted that two DBs hold a restrictedbanking licence and are not included in themoney-creating sector for the time being.

• International or administered banking units(IBUs or ABUs).

These credit institutions are licensed to carryon banking business from within Cyprus. Theyare required, however, to confine themselvesto transactions denominated in currenciesother than the CYP and primarily tocustomers other than residents of Cyprus.As from 1 January 2001, IBUs and ABUs havebeen permitted to grant medium and long-term loans in foreign currencies to residents.

A separate group of credit institutionsoperates under the Co-operative SocietiesLaw of 1985, as amended:

• Co-operative credit and savings societies(CCSSs)

These institutions are neither subject to thesupervision of the CBC nor to the prudentialstandards that apply to credit institutions.CCSSs have indirect access to monetarycredit through the Co-operative Central BankLtd, which acts as their central bank, but arenot subject to the regulations issued by theCBC. The Registrar for Co-operativeDevelopment, who reports to the Ministry ofCommerce, Industry and Tourism, supervisesthe operations of CCSSs in order to ensurethat they are in compliance with the relevantlaws.

It should be noted that IBUs/ABUs, CCSSsand the two DBs that hold restricted bankinglicences (included in the Preliminary List ofMFIs because they fulfil the definition of creditinstitutions) will form part of the reportingpopulation in the area of money and bankingstatistics upon accession.


Currently no money markets funds (MMFs)have been identified. However, in thecontext of the ongoing co-operation betweenthe CBC and the Securities and ExchangeCommission, the latter will inform the CBCwhenever it issues a licence to an MMF.


Measures of money do not include any suchdeposit liabilities.


Cyprus


DBs offer their customers a wide range ofdeposit facilities and other products. Theseinclude:

Deposits:

– sight deposits and current accounts, onwhich cheques can be drawn, in CYP andin foreign currency;

– savings accounts;

– deposits at notice or for fixed periods inCYP and in foreign currency;

– index-linked deposits: fixed deposits forperiods of two years or more, withguaranteed invested capital and performancelinked to that of foreign stock markets.

Other products:

– credit facilities and related products: shortand long-term finance in the form ofadvances or overdraft facilities, term loans,syndicated loans, discounting of bills, hirepurchase finance, financial leasing, factoringand other facilities related to the financingof international trade;

– plastic money: both debit and credit cards;

– private banking: provision of internationalinvestment products, banking and otherfinancial services to high net worthindividuals;

– foreign exchange: all types of foreignexchange transactions including letters ofcredit, guarantees, forward contracts andoptions;

– stock brokerage services: throughsubsidiaries.

Moreover, DBs have enriched their productrange by upgrading their technology. Theyoffer 24-hour service through variousautomated teller machines (ATMs) installedthroughout Cyprus as well as through somefully automated self-service branches. Servicesare also offered via the telephone (telephonebanking), and online banking services havebeen introduced via the internet (electronicbanking) and via mobile telephones (WAP).

2. 5 Statistical balance sheets of themonetary institutions


The MFSS of the CBC and the BS&RD of theCBC have set up a working committee, themain purpose of which is the design andintroduction of a new data collection schemeof MFI balance sheet items. This will enablethe CBC to produce separate balance sheetsthat will satisfy both the supervisoryrequirements of the Bank and the statisticalrequirements of the ECB, as well as any otherrelevant statistical requirements.

A description of the main balance sheet itemsis provided below:

Asset items:– Cash and balances with the central bank:

includes all local and foreign currencynotes and coins owned and held by theDBs as well as the total of balancesmaintained with the CBC in the minimumreserve account, the reverse repurchaseagreement (repo) account and theadditional deposit account.


Institution Number ofinstitutions

CBC 1


DBs 16IBUs and ABUs 30CCSSs 362

Total 409


Cyprus

– Drafts, cheques and bills bought: includesall cash instruments in the process ofcollection, i.e. cheques, bankers’ drafts,postal and money orders, sightdocumentary bills of exchange, negotiationof sight documents and claims againstcredit card payments, which are payableimmediately upon presentation.

– Loans and advances to banks: includes allbalances maintained with DBs and banks inforeign countries, as well as balances withCyprus-based IBUs, including ABUs.

– Loans and advances to customers:comprises all bills in CYP and in foreigncurrency, including promissory notesdiscounted by the DB, as well as the totalamount of credit facilities extended in theform of overdrafts on current account andloans, including facilities extended on hire-purchase terms, for factoring purposes, andcredit card facilities.

– Treasury bills.

– Debt securities: comprises transferabledebt securities and any other transferablefixed-income securities, local or foreign,issued by the government, other publicbodies, banks, building societies or otherissuers.

– Equity shares: comprises the DBs’ totalholdings of shares and other variable-yieldsecurities.

– Participating interests: comprises the totalinterests held on a long-term basis in theshare capital of other banks or companiesfor the purpose of securing a contributionto their activities by the exercise ofsignificant influence arising from or relatedto that interest.

– Shares in group undertakings: includes thetotal value of shares held on a long-term

basis in the capital of a group company, aswell as capital assigned to overseasbranches.

– Intangible fixed assets.

– Tangible fixed assets.

Liability items:– Amounts due to banks: comprises the

amount of credit granted by the CBC tothe DBs, as well as all balances in CYP andin foreign currency standing to the creditof local and foreign banks, i.e. banks inforeign countries and Cyprus-based IBUsand ABUs.

– Customer deposits: includes all customerbalances in CYP and in foreign currency.Deposits have been divided into demand,notice and fixed-term deposits.

– Debts evidenced by certificates: includesboth debt securities and debts for whichtransferable certificates have been issued.

– Loan capital: comprises subordinated andother loan capital in CYP or in foreigncurrency, which has a minimum initialrepayment period of five years and inrespect of which there is a contractualobligation that, in the event of winding-upor bankruptcy, it is to be repaid only afterthe claims of depositors and othercreditors have been satisfied.

– Called-up share capital.

– Share premium.

– Revaluation reserves.

– Profit and loss account.


Cyprus

Where appropriate, assets and liabilities aresplit into two categories on the basis of thecurrency in which they are denominated:

Assets Liabilities

Breakdown by Breakdown by Breakdown by Breakdown byinstrument/maturity counterparty instrument/maturity counterparty

Loans and advances to banks(separately for local and foreignbanks)

on demandwithin three monthsover three months, but notmore than one year

over one year, but not morethan five years

over five years

Residents

Banks:CBClocal banks

Non-banks:

governmentgovernment agencieslocal authoritiespublic corporationsinsurance companiespension and provident fundsprivate residents (individuals and

corporate bodies)

Non-residentsforeign banks (including IBUs)

Non-banks:international business companiesother corporate bodiesCypriot expatriates

other individuals

Amounts due to banks(separately for local and foreignbanks)on demandwithin three monthsover three months, but not morethan one year

over one year, but not morethan five years

over five years

Residents

Banks:CBClocal banks

Non-banks:

Loans and advances to customerson demandwithin three monthsover three months, but not morethan one year

over one year but not more thanfive years

over five years

Debt securitiesdue within one year

governmentgovernment agencieslocal authoritiespublic corporationsother residents

Non-residentsforeign banks(including IBUs)

non-banks(individuals and corporate bodies)

Customer depositsDeposits at notice and fixed-termdepositswithin three monthsover three months, but not morethan one year

over one year, but not more thanfive years

over five years

Debts evidenced by certificatesDebt securities in issuewithin one yearone year and over

Othersnot more than three monthsover three months but not morethan one year

over one year but not more thanfive years

over five years

Box 1

M1 (primary liquidity) includes:

– currency in circulation net of cash in CYP held in

the tills of DBs

– demand (overnight) deposits in local and foreign

currency of residents (excluding government and

government agencies) with DBs

– sight balances of public corporations with the

CBC

M2 (total liquidity) includes:

– M1

– savings, notice and fixed deposits in local and

foreign currency of residents (excluding

government and government agencies) held with

DBs

– sinking funds of public corporations with the

CBC

amounts in CYP (local currency) and amountsin foreign currency.

2.5.2 Breakdown of the main balance sheet items by maturity, counterparty and currency


Cyprus

2. 6 National measure(s) of money:definitions and remarks

2.6.1 National definition of money andinstrument breakdown of monetaryaggregates

See Box 1.

2.6.2 Sector allocation of holdings ofnegotiable instruments

The negotiable instruments issued by themoney-creating sector currently comprisecash and debt securities issued by DBs.

Box 2Net foreign assets are defined as Foreign assets less Foreign liabilities

Foreign assets comprise:

– Official international reserves of the Republic of Cyprus (including reserve position in the IMF and

government foreign liquid funds)

– Foreign assets of DBs:

– balances with foreign banks

– foreign drafts, cheques and bills bought

– foreign bills discounted

– overseas investments

– cash in foreign currency

– advances and loans in foreign currency to non-residents

Foreign liabilities comprise:

– deposits with DBs in local and foreign currency by non-residents

– amounts due to foreign banks by the CBC and the DBs

Net claims on the public sector comprises:

– Loans and advances to government and government agencies by the CBC and the DBs

– Investments in Treasury bills and other government securities by the CBC and the DBs

Less– Deposit of government and government agencies with the CBC (including sinking funds) and the DBs

– Reserve position in the IMF

– Loans and advances to DBs by government

Claims on the private sector comprises:

– Advances and loans by DBs in local and foreign currency to individual residents and in local currency to

non-residents.

– Local bills discounted

– Securities issued by public corporations and other local authorities held by DBs

– Shares acquired by DBs in satisfaction of debts

– Government-guaranteed debt securities held by the CBC

Other net items not classified elsewhere comprise:

– Capital and reserves of the CBC and the DBs

– Inter-DB balances and balances between the CBC and the DBs

Owing to the nature of cash money, no explicitallocation between various economic sectorscan be made. However, the amount ofbanknotes and coins held by sectors other thanDBs (including both resident and non-residentunits) can be derived implicitly as the differencebetween the currency issued by the CBC andbanknotes and coins held by the DBs.

Debt securities issued by DBs and traded inthe CSE are mainly distinguished into thoseheld by provident funds, legal and naturalpersons.

2. 7 Counterparts of money


Cyprus

– Other assets (including fixed assets) and other liabilities of the CBC and the DBs

– Local drafts, cheques and bills bought (DBs)

– Provisions for liabilities and charges (DBs)

– Loan capital of DBs

– Net balances in respect of liquidity-providing/absorbing operations of the CBC

– Liabilities in respect of allocations of SDRs

– Deposits of insurance companies and international organisations with the CBC

2. 8 Reserve money

Two measures of reserve money arecurrently calculated at the CBC.

A narrower measure of reserve money innational terminology is defined as the sum ofthe following:

– Currency in circulation including cash inCYP held in the tills of DBs;

– All accounts of DBs in CYP maintainedwith the CBC excluding those in respectof liquidity-absorbing/providing operations.

A broader measure of reserve money isdefined as the sum of the following:

– Currency in circulation (including cash inCYP held in the tills of DBs);

– All accounts of DBs in CYP and foreigncurrencies maintained with the CBC,excluding those in respect of liquidity-absorbing/providing operations;

– Deposits and sinking funds of publiccorporations and local authorities with theCBC.

2. 9 Reporting procedures


Both the Banking Law and the Central Bankof Cyprus Law empower the CBC to collectinformation from banks for monetarystatistics purposes, specifically as follows:

• Banking LawIn accordance with Section 25(1), banks arerequired to submit to the CBC within 15days of the end of each month, or withinsuch a longer period as the CBC maydetermine, a certified balance sheet as at theend of that month in a form prescribed bythe CBC.

Furthermore, Section 25 (2) provides thatthe CBC may require a bank to submitperiodically or at its request such otherinformation and within such time as may bespecified by the CBC.

It should be noted that, in accordance withSection 43 (2), the infringement of Section 25is an offence punishable by a fine. In addition,under Section 42, the Governor of the CBChas the power to impose, for each and everycontravention of Section 25, an administrativefine.

• Central Bank of Cyprus LawThe CBC is authorised under section 63 ofthe new CBC Law to request that banks anddesignated financial institutions, governmentservices, public corporations, as well as anynatural person or legal entity, without beingentitled to invoke bank secrecy or any otherform of secrecy, should report to the Bankall the data and information in theirpossession which are necessary for thefulfilment of the Bank’s objectives and for theperformance of its tasks as laid down insections 5 and 6, respectively (as describedin section 1.3.1.2).

Section 65 of the CBC Law deals withoffences and the right to impose sanctions.The provisions specifically provide in thiscontext that any person who contravenes


Cyprus

any of the provisions of the CBC Law shallbe guilty of an offence and, in case ofconviction, shall be punished with a fine notexceeding fifty thousand pounds and, in caseof continuing offence, with a further fine ofup to one thousand pounds for each day thatthe offence was applicable.


As already mentioned in section 2.3.1, CCSSs,IBUs/ABUs and the two DBs holding arestricted banking licence are not included inthe reporting population for the compilationof monetary statistics for the time being.


The 14 DBs which are the reportinginstitutions for the compilation of monetarystatistics use a uniform reporting scheme thatis described in section 1.3.2.3 under the “Bankbalance sheet statistics/monetary aggregatesand counterparts” column. The balance sheetmust be prepared in accordance with theIAS, as required by the CBC.


The CBC balance sheet is prepared on amonthly basis and is available on the second

working day of the following month. The dataare downloaded from the general ledger ofthe CBC and the balance sheet is thencompiled electronically. The CBC balancesheet is submitted to the Governor andsubsequently published in the Official Gazette.

The CBC balance sheet is prepared inaccordance with the applicable provisions ofthe CBC Law and the InternationalAccounting Standards. The historical costaccounting convention is followed, except forthe valuation of the following financial items:

– foreign currency balances: valued at mid-market closing exchange rates at thebalance sheet date;

– securities: valued at cost, adjusted for theamortisation of the premium or discount,which is effected on a straight-line basisover the period to maturity;

– bullion: valued using the recommendedmethodology of the European MonetaryInstitute (EMI).

– fixed assets: valued at cost, lessdepreciation. Land and works of art arenot depreciated.

Moreover, a report is prepared every sixmonths on the currency, funds and securitieswhich is submitted to the President of theRepublic for further submission to the Houseof Representatives.



Number of % (of the % (of the totalreporting category total ) balance sheet of

agents all institutions)

CBC 1 100 14.2

DBs 14 100 85.8

Other monetary institutions 0 - -

Total 15 - 100


Cyprus

2. 10 Data processing and compilationmethods


The data provided by reporting institutionsrefer to end-of-period stocks.

2.10.2 Revisions

With respect to the CBC financial statements,any revisions prior to publication are carriedout irrespective of the time period. The CBCbalance sheet is published in the CBC’sAnnual Report, which is usually released byJuly of the following year. In the rare eventthat the financial statements need to berevised after publication, this is carried out inthe financial statements of the following yearand in accordance with the relevant IAS.

When banks’ balance sheet statistics andmonetary aggregates and counterparts arefirst released, the data are consideredprovisional. Revisions to the data are madeas and when required, and the revised figuresare included in the next release.

When major revisions or reclassification ofitems occur, the CBC requests banks torevise their figures on a monthly basis,starting with the month in question and goingbackwards to cover a period which willinclude the two preceding Decembers.


During the process of monthly monitoring of banks’balance sheets, certain changes due toreclassifications, revaluations and write-offs/write-downs are often identified and used for internalanalysis. As far as reclassifications are concerned,if the need arises, stocks of data for past periods areadjusted accordingly. The ECB’s requirement forthe derivation of flow statistics will be fulfilled in thecontext of implementation of Regulation ECB/2001/13 and the Guideline ECB/2002/5. Therefore,the first harmonised flow statistics are scheduledto be compiled upon accession.

2.10.4 Seasonal adjustments

The only published figures that are seasonallyadjusted on an annual basis are the growthrates of currency in circulation, demanddeposits, primary liquidity, quasi-money, totalliquidity and claims on the private sector.These figures are deseasonalised using the X-11 method of the Washington-based Bureauof the Census.

2. 11 Publication

2.11.1 First release of data (including themedium)

The CBC balance sheet is published monthlyin the weekly Official Gazette, usually by theend of the following month.

The first release of monetary statistics tothe public is made about 21 days after theend of the reference month, in a publicationentitled “Monetary Survey”. This publicationis first released to the public in paper formand, within a few days of its release, isavailable on the website of the CBC(www.centralbank.gov.cy). In addition, it ismailed to various interested parties and isalso available on demand from the CBC.

This publication includes inter alia data onmonetary aggregates and counterparts, asummary of the assets and liabilities of theCBC, DBs and IBUs, and total deposits andloans for the CCSSs. It also includes data onsectoral distribution of DB credit, an analysisof DB advances and loans in local and foreigncurrency, analysis of DB deposits by sectorand type, as well as further analysis of DBtime deposits.

2.11.2 Core weekly/monthly publications

Another core publication through whichmonetary statistics are disseminated is the“Monthly Monetary Policy Report”, which hasbeen produced since August 2001. Thisreport is published two weeks following the


Cyprus

meeting of the Monetary Policy Committee(MPC), which is usually held on the secondThursday of the month. It includes monthlydata on monetary aggregates andcounterparts, the sectoral distribution of DBcredit and base money. It is published inpaper form and on the Bank’s website(www.centralbank.gov.cy).


In addition to the publications mentioned inSections 2.11.1 and 2.11.2, the CBC publishesits Annual Report about six months after theend of the year of reference. It is available inpaper form only and includes data onmonetary aggregates and counterparts, asummary of the assets and liabilities of DBs,an analysis of credit to the private sector bysector, the total deposits and loans of theCCSS, and the financial statements of the CBC.

Moreover, monetary statistics are containedin the following publications of the SSR:

• “Monthly Economic Indicators”, publishedevery six months in paper form.

This publication includes data on monetaryaggregates and counterparts, total depositsand loans of CCSS, as well as an analysis ofCCSS deposits and loans. It includes monthlydata for the last twenty-four months,quarterly data for the last eight quarters, andannual data for the last three years.

• “Statistical Abstract”, published annually inpaper form.

This publication includes annual data on thevolume of money, the consolidated balancesheet of DBs, DB deposits and advances, loansand bills discounted by sector, currency incirculation and loans and deposits of CCSSs.

3 Contacts at the Central Bank of Cyprus


Eliana PsimolophitesMonetary and Financial Statistics SectionEconomic Research and Statistics DivisionTelephone: +357 22 714437Fax: +357 22 378155E–mail:[email protected]

Androulla MelifronidouMonetary and Financial Statistics SectionEconomic Research and Statistics DivisionTelephone: +357 22 714438Fax: +357 22 378155E–mail:[email protected]

Christina NicolaidouMonetary and Financial Statistics SectionEconomic Research and Statistics DivisionTelephone: +357 22 714429Fax: +357 22 378155E-mail:[email protected]


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Czech Republic


Czech Republic



CIs credit institutions

CNB Czech National Bank

CoD certificate of deposit

Coll. Collection of laws

CPI consumer price index

CSO Czech Statistical Office

CZK Czech koruna


FDI foreign direct investment

GDP gross domestic product




MBS money and banking statistics

MFI monetary financial institution

MLSA Ministry of Labour and Social Affairs

MMF money market fund


NPF National Property Fund

PPI producer price index


SNA 1993 System of National Accounts 1993


Czech Republic




Česká národní banka – the Czech NationalBank (CNB) – is divided into elevendepartments and three special departments.These eleven departments are further dividedinto divisions. The statistics divisions are partof the Monetary and Statistics Department.

See Annex 1.

1.1.2 Organisation of statistical work atthe national central bank

The CNB’s Monetary and StatisticsDepartment is divided into eight divisions (theorganisational chart of the CNB’s Monetaryand Statistics Department is also included inAnnex 1). The statistical work is maintainedin three divisions, which are responsible forthe compilation and dissemination of moneyand banking statistics (MBS), the compilationand administration of the balance of payments(b.o.p.), and for the development of statisticaldata systems.

• The Money and Banking Statistics Divisionis responsible for the design, methodologyand compilation of balance sheet statisticsand interest rate statistics in line withnational and ECB requirements.Furthermore, the MBS division isresponsible for the projection of all(statistical and supervisory) statementssubmitted by commercial banks and othermonetary financial institutions (MFIs). Thisdivision compiles statistical surveys for theCNB’s monetary analyses, for internationalauthorities and other users within theCNB, as well as the general public. TheMBS division is also responsible for thecompilation and maintenance of the List ofMFIs in the Czech Republic.

• The Balance of Payments Division (BoPDivision) is responsible for the concept,methodology and compilation of b.o.p.statistics, foreign direct investment (FDI)and portfolio investment statistics, and theinternational investment position (i.i.p.). Itis also responsible for providing thesedata to international institutions and forco-ordinating the IMF’s Special DataDissemination Standard (SDDS) system. Inorder to compile the b.o.p. and i.i.p.,statistical information from the bankingsector, corporate sector and governmentinstitutions is used.

• The Statistical Data Processing Division isresponsible for collecting and processingstatistical data for CNB purposes, andensures the statistical data exchange withnational and international institutions. Thisdivision manages the development of thebanking information system, including themeta-information system, and publishesstatistical data on the CNB website.

Other departments and/or divisions alsoparticipating in the final compilation of MBSdata include:

• the Monetary Analysis and Public FinanceDivision (the national monetary survey andmonetary base);

• the Banking Regulation Department andBanking Supervision Department(methodological design and datacompilation for supervisory purposes);

• the Financial Markets Department(databases on exchange rates, interestrates and the official reserves held by thecentral bank).


Four basic laws provide the framework forthe activities of the central bank of the CzechRepublic:


Czech Republic

1 Collection of laws.

• Act No. 6/1993 Coll.1 on the CzechNational Bank (as amended);

• Act No. 21/1992 Coll.1 on Banks (asamended);

• The Foreign Exchange Act No. 219/1995Coll.1 (as amended);

• Act No. 124/2002 Coll.1 of 13 March 2002on the Transfers of Funds, ElectronicPayment Instruments and Payment Systems(the Payment System Act) – in force asfrom 1 January 2003.

The complete wording of these laws isavailable in English on the CNB websiteat http://www.cnb.cz in the “Legislation”section.

The Act on the CNB and the Act on Banksdefine these entities and provide the legalframework for their activities. The ForeignExchange Act stipulates the rights andobligations of residents and non-residents inforeign exchange relations, the conditions forforeign exchange licences and permits, andthe nature of the foreign exchangesupervision provided by the CNB and theMinistry of Finance (MoF). The PaymentSystem Act regulates transfers of funds, theissuance and use of electronic paymentinstruments, and the establishment andoperation of payment systems.

The CNB is authorised under the Act on theCNB to issue secondary legislation(“provisions” and “decrees”) laying down thedetailed legal framework for some of theactivities of the central bank, commercialbanks and certain other entities. Many ofthese focus on the banking supervisionprovided by the central bank. The mostimportant provisions in this area are:

• Decree of the CNB No. 166/2002 Coll.1 of8 April 2002 stipulating the EssentialElements of a Banking Licence Application;the essential elements of an application forthe consent of the Czech National Bank toacquire or increase a qualifying holding in

a bank, to a person concluding a controlagreement with a bank or to a personexecuting a legal act aimed at takingcontrol of a bank; and the essentialelements of a notification of a reductionof a qualifying holding in a bank or offorfeiture of the position of parentundertaking in respect of a bank;

• Decree of the CNB No. 333/2002 Coll.1 of3 July 2002 stipulating the Prudential Rulesof Parent Undertakings on a ConsolidatedBasis;

• Provision of the CNB No. 3 of 28 June1999 on the Capital Adequacy of Banks,including Credit and Market Risks (asamended by CNB Provision No. 5 of 7September 2000) – in force until 31December 2002;

• Provision of the CNB No. 2 of 3 July 2002on the Capital Adequacy of Banks andother Prudential Rules on a Solo Basis – inforce as from 1 January 2003;

• Provision of the CNB of 9 July 1998 on thePrinciples of Classification of Claims onCredits and Creation of Provisions forSuch Claims – in force until 31 December2002;

• Provision of the CNB No.9 of 6 November2002 stipulating rules for the assessmentof financial receivables and the creation ofprovisions and reserves, and rules for theacquisition of certain types of assets – inforce as from 1 January 2003;

• Provision of the CNB No. 2 of 27 April2001 on standards for managing liquidity inbanks;

• Provision of the CNB No. 3 of 30 July2002 on credit risk management in banks– in force as from 1 January 2003;


Czech Republic

• Provision of the CNB No. 4 of 30 July2002 on market risk management in banks– in force as from 1 January 2003.

All the decrees and provisions are publishedin the Bulletin of the CNB and also in Englishon the CNB website at http://www.cnb.cz inthe “Legislation” section.

Other CNB decrees and provisions regulatethe issuance of banknotes and coins, foreignexchange supervision and the collection ofdata by the CNB; some of these can be foundin English on the CNB website. A list of theprovisions on data collection and statisticscan be found in Section 2.1.1.




The CNB is a legal entity carrying out itsactivities under the special law mentioned inSection 1.2. The CNB is independent of theGovernment.

In particular, the CNB acts as:

• the monetary authority of the CzechRepublic;

• the issuer of banknotes and coins;

• the controller of currency circulation andthe clearing house for payments andsettlements between domestic banks inlocal currency;

• the regulator and supervisor of thedomestic banking sector;

• the supervisor of the foreign exchange areain the Czech Republic, the manager ofmonetary reserves and the declarer of theexchange rates of the Czech currency;

• the keeper of the accounts of the statebudget, state funds and state financial

assets and liabilities for governmentrevenue and expenditure.


The primary objective and responsibility ofthe CNB is to maintain price stability. Forthis purpose, the CNB:

• sets monetary policy;

• issues banknotes and coins;

• manages the circulation of currency,administrates payments and clearingbetween banks and promotes their smoothand efficient operation;

• supervises the activities of banks, foreignbanks’ branches and any consolidatedgroups that contain a bank that has itsregistered address in the Czech Republic,and sees to the sound operation andrational development of the banking systemin the Czech Republic.

In pursuing its primary objective, neither theCNB nor the Bank board shall seek or takeinstructions from the President, fromParliament, from the Government or anyother public body. The CNB and theGovernment inform each other on mattersconcerning the principles and measures ofmonetary and economic policy. The CNB actsin an advisory capacity vis-à-vis theGovernment in respect of matters ofmonetary policy and banking.

The CNB is not allowed to grant any loansor funds to the Government or public bodies.

The CNB is obliged to:

• submit a report on monetary developmentsto Parliament at least twice a year;

• inform the general public on monetarydevelopments at least once every threemonths.


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The CNB also provides information onmonetary developments and the b.o.p. tointernational monetary and statisticalinstitutions.



In addition to its competencies in the field ofmoney and banking statistics, the CNB alsoconducts statistical activities in the followingareas:

The CNB is fully responsible for b.o.p.statistics and for compiling the b.o.p. figuresfor the Czech Republic. The CNB compilesthe international investment position and FDIand portfolio investment statistics. It collectsdata for these purposes from domestic banks,branches of foreign banks and other reportingagents, using data from the Czech StatisticalOffice (CSO), the MoF and other sources ofinformation as well.

The CNB collects data on reserve basestatistics. Such data are only provided bydomestic banks and branches of foreignbanks, and are used to check whetherindividual domestic banks and branches offoreign banks meet the minimum reserverequirements. No other entities are subjectto reserve requirements.

The CNB is fully responsible for collectingand compiling data to enable prudentialsupervision of the banking sector. The MoFand other authorities (e.g. the SecuritiesCommission) are responsible for overseeingother financial institutions.

The CNB’s other statistical activities include,in particular, the statistical investigation ofinflation expectations and certain statisticsrelating to securities, financial derivatives andthe financial markets.


The main macroeconomic statistical activitiescarried out by other public authorities are asfollows:

CSO:

• national accounts statistics and compilationof macroeconomic aggregates (GDP);

• price indexes (consumer price indexes(CPIs), producer price indexes (PPIs), etc.);

• foreign trade statistics (including balanceof trade);

• other macroeconomic statistics on

• industry and construction• services• the population• labour and social statistics• environment and agriculture.

MoF:

• general government statistics.

Ministry of Labour and Social Affairs (MLSA):

• unemployment statistics.

The CNB and CSO collaborate in thefollowing areas in particular:

• provision of aggregated data by the CNBto the CSO on the banking sector, theb.o.p., FDI, etc. in order to compile thefinancial accounts and to meet other CSOneeds;


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• receipt of data from the CSO for the CNBrelating to price indices, the balance oftrade, macroeconomic indicators (GDP,etc.) and selected types of financialinstitution.

1.3.2.3 An overview of statistical data collectionand compilation

See Table 1.

Table 1



and counterparts

Collected data

Collecting agents

Description Data are collectedelectronically:

– 15 calendar days afterthe end of thereference period(January-November)

– 31 calendar days afterthe end of December

Monthly survey ofsecurities issued bybanks

CNB CNB CNB

CNB

CSO

Central government

International financial institutions

CNB

CSO

Central government

International financial institutions

CNB

Data are collected electronically:

– 15 calendar daysafter the end of thereference period(January–November)

– 31 calendar daysafter the endof December

Data are collected electronically:

– 17 calendar days after the end of the referenceperiod (January-November)

– 31 calendar days (for new loans 17 days)after the end of December

Users

Monthly assets and liabilitiesstatement (Balance Sheet forMBS)

Partial monthly statements linkedto the balance sheet on deposits,loans and securities (held andissued), broken down in terms ofcounterpart sectors, currencies,maturity etc. – see Sections 2.5.2and 2.9.3

Quarterly statement on selectedassets and liabilities broken downby country.

Monetary aggregates andcounterparts are compiled in theCNB on a national as well as on aharmonised basis

Monthly survey of stock of client loans and depositsbroken down by currency and interest rate

Monthly survey of newly granted client loans brokendown by currency and interest rate

Financial market interest rates


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The fundamental legal basis for money andbanking statistics is set forth in the Act onthe CNB and in the Act on Banks. Underthese acts, the CNB:

• specifies principles in legal rules and co-ordinates the development of the bankinginformation system for money and banking

Table 1 (continued)


Collected data

Collecting agents

Users

Description

The reserve base iscompiled monthly from theMBS balance sheet

Sources:CSO:Non-financial corporationsHouseholdsNon-profit institutionsOther financialintermediariesCNB:Financial corporationsMBS (balance sheet data)b.o.p. + i.i.p.MoF:Central government

17 reports for bankingsupervision purposes inaccordance with the CNBprovisions mentioned inSection 1.2, includingbalance sheet and profit andloss accounts compiledstrictly according toaccounting standards

CNB CSO

CNB

MoF

CNB

CSO

MoF

CNB

CNB CNB

CSO

Central government

International financialinstitutions

CNB

CSO

Central government

International financialinstitutions

CNB – banking regulationand banking supervisiondepartments

Data are collectedelectronically within theframework of the balancesheet at the same frequencyand timeliness.

Data are collected fromdifferent sources. Finalcompilation is performed byCSO on an annual basis.

Data are collectedelectronically – on a solobasis 23 calendar days afterthe end of the referenceperiod (usually monthly)– on a consolidated basis35 calendar days after theend of reference period(quarterly).

Data are collectedelectronically (mainly) andon paper with variousdegrees of timeliness.

• Monthly statement of theforeign exchange and CZKposition of banks (compiledfrom 2003 in the CNB frombalance sheet statistics data)

• Monthly and quarterlysurveys of foreign exchangepayments and collections.

• Portfolio investmentstatistics (foreign anddomestics securities – seesection 2.9.3)

• Trade balance from CSO

• Customs statistics

• Direct reporting fromenterprises, foreign claimsand liabilities, FDI

statistics. The CNB is entitled to requirefrom banks, branches of foreign banks andother entities which are financialinstitutions or have at their disposalinformation necessary for the compilationof the balance of payments in the CzechRepublic such information and materials asare necessary for its activities;

• establishes in specific decrees or provisionsthe methodology and conditions forsubmitting the required information andmaterials, defining, in particular, the


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content, form, format, deadlines andmanner of transmitting the said informationand materials;

• obliges, conversely, banks and branches offoreign banks to submit all requiredinformation and materials.

For this purpose, the CNB has issued thefollowing decree and provisions in the fieldof money and banking statistics (latest validwording):

• CNB Provision No. 6 of 30 November 2001stipulating the Submitting of Statements byBanks and Branches of Foreign Banks to theCNB, as amended by CNB Provision No. 7of 30 August 2002 (replaced by new provisionNo. 10 of 3 December 2002, in force asfrom 1 January 2003);

• CNB Provision No. 7 of 19 December2001 stipulating the Methodology forCompiling of Statements Submitted byBanks and Branches of Foreign Banks tothe CNB, as amended by CNB ProvisionNo. 8 of 25 September 2002 (replaced bynew provision No. 13 of 18 December2002 in force as from 1 January 2003);

• CNB Provision No.10 of 6 November 1997stipulating the Manner of Transmitting andAccepting of Automated Statements DataSubmitted by Banks and Branches ofForeign Banks to the CNB;

• CNB Provision No 36/2002 of 25 August2000 stipulating Payment Items to CodeFinancial Transactions by Purpose – inforce until 31 December 2002;

• Decree of the CNB No. 514/2002 Coll.1 of20 November 2002 stipulating the termsand conditions for coding by purposetransactions necessary for the compilationof the balance of payments in the CzechRepublic – in force as from 1 January 2003.

All these provisions have been published inthe CNB Bulletin. The provisions onstatements are only available in the Czech

language. In view of their character andspecific purpose, they have not been put onthe CNB website; however, work is underwayto post the new provisions No. 10/2002 andNo. 13/2002 in full on the CNB website(Czech version only).

The provision on payment items waspublished in the CNB Bulletin and also in theCollection of Laws and has been posted onthe CNB website (Czech and Englishversions). The decree on coding transactionsnecessary for the compilation of the balanceof payments has been published in theCollection of Laws and posted on the CNBwebsite.


The money and banking statistics follownumerous national and internationalstandards, first and foremost in code listsused for this purpose. Many of the statisticalstandards in the Czech Republic are set outin CSO provisions, and most have beenharmonised with EU standards. The mostimportant CSO provisions used in money andbanking statistics are:

• CSO Provision of 7 May 1993 (as amended)on the Country Code List;

• CSO Provision of 1 December 1993 (asamended) on the Branch Classification ofEconomic Activities;

• CSO Provision of 13 December 1995 (asamended) on the Currency Code List;

• CSO Provision of 20 October 1997 (asamended) on the Institutional Sectors andSub-sectors Code List.

The European System of Accounts 1995 (ESA95) sector and sub-sector classification hasbeen used in state statistics (except bankingstatistics) since 1998. The definition ofresidents and non-residents was onlyharmonised with the revised System ofNational Accounts (SNA 1993) in the banking


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statistics in the same year. The ESA 95 sectorclassification has been fully applied in moneyand banking statistics since January 2001.

The branch classification of economicactivities used both in state statistics and inmoney and banking statistics is based onCouncil Regulations (EEC) Nos. 3037/90 and761/93.

The other main international statisticalstandards applied are:

• ISO 31661 Country Codes and ISO 31662Country Subdivision Codes;

• ISO 4217 Tables of Codes for theRepresentation of Currencies and Funds.

Banking statements for money and bankingstatistics are linked to Czech accountingstandards, especially to the Chart of Accountsand Accounting Instructions for Banks asdecreed by the MoF. EU Directives onaccounting and the International AccountingStandards (IAS) were implemented in the lastamendment to the Accounting Law and inthe Czech accounting standards for banksand some other financial institutions, whichentered into force in January 2002.

The money and banking statistics system atthe CNB is comprehensive and interlinked,so that all of the standards used are appliedto all parts of the money and bankingstatistics.



According to the statistical definitions,“residents” are all domestic and foreign legaland natural persons, including branches of

foreign banks and foreign owners of buildingsand land, that have their centre of economicinterest within the economic territory of theCzech Republic. Foreign legal and naturalpersons are considered residents after oneor more years of economic activity withinthe territory of the Czech Republic, with theexception of branches of foreign banks andforeign owners of buildings and land, whichbecome residents at the moment of therelevant legal act (foreign owners of buildingsand land only in respect of transactionsaffecting the said land or buildings).

Branches of units which are located abroad(having their centre of economic interestwithin the territory of another country) areconsidered non-residents from the point ofview of the Czech Republic.

The economic territory of the Czech Republiccomprises:

• the geographic territory administered bythe Czech Government,

• Czech national airspace,

• territorial enclaves – i.e. geographicterritories situated in the rest of the worldand used, under international treaties oragreements between states, by generalgovernment agencies of the Czech Republic(embassies and consulates).



The MBS sector classification in the CzechRepublic is based on the ESA 95, as describedbelow (see Table 2):


Czech Republic

2.3 Population of monetary financialinstitutions


Credit institutions (CIs) are defined inaccordance with the ESA 95, and compriseuniversal commercial banks, building savingsbanks (building societies) and credit unions(called “savings and credit co-operatives”).

All banks and branches of foreign banks in theCzech Republic have to be established and carryout their activities in accordance with Act No.21/1992 Coll. on Banks. The Act does not defineany specific categories of banks, so that – in law– all banks (except building savings banks) aretreated as universal banks.

Under the Act on Banks, a bank is a legal entityfounded as a joint stock company with itsregistered office in the Czech Republic which:

• accepts deposits from the general public,

• provides credits, and

• has been granted a banking licence for thepurpose of carrying out its activities.

In addition to the activities listed above, abank may carry out other activities stipulatedin its banking licence pursuant to the Act onBanks (such as investing in securities, financialleasing, guaranteeing and collecting payments,issuing payment instruments, etc.). The rangeof additional activities can be limited by theCNB through the bank’s licence.

In line with their own business decisionsand within the scope of their licences,universal banks carry out a range of differentactivities which in other countries are carriedout by different specialised banks, such assavings banks, mortgage banks and merchantbanks.

Table 2


S121 Central bank – in the Czech Republic, the CNB

Part of S122 – banks Other monetary financial institutions – in the CzechRepublic, universal banks as well as building savings banks(building societies)

Part of S122 – non-banks Other monetary financial institutions – in the CzechRepublic, credit unions and money market funds

S123 Other financial intermediaries

S124 Financial auxiliaries

S125 Insurance corporations and pension funds

S100 Non-financial corporations

S140 Households

S150 Non-profit institutions serving households

S1311 Central government

S1312 State government3

S1313 Local government

S1314 Social security funds

(S2) Non-residents4

Money-holding sector


Money-neutral sector2

Non-resident sector

1 For the compilation of harmonised monetary aggregates and counterparts, the money-neutral sector comprises central governmentonly. For the compilation of national monetary aggregates and counterparts, the money-neutral sector contains the entiregovernment sector.

2 Owing to the state structure of the Czech Republic, no institutional unit is classified in this sub-sector. Regional governmentbodies are included in sub-sector S1313.

3 In MBS the same sub-sectors are used for non-residents as for residents.


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2.2.2.2 Comparison between the sectors of the national economy and the ESA 95

See Table 3.

S22Third countries and

internationalorganisations

Table 3




S121Central bank

S121Central bank


S122Other monetary financial institutions – banks

S122Other monetary

financial institutions

S12Financial corporations

Money-holdingsector

S122Other monetary financial institutions – non-banks

S123Other financial

intermediaries, exceptinsurance corporations

and pension funds

Money-holdingsector


S125


S11Non-financial corporations

S11Non-financial corporations

S14Households

S14Households



Money-neutralsector

S13General

government

S1311Central government

S1311Central government S13

General government

Money-neutralsector

S1312State government


Money-holdingsector

S1313Local government

S1313Local government

S1314Social security funds


Non-residentsector

S2

Non-resident sector5

S211EU

countries

S21European

Union

S2Rest of the world

Non-residentsector



S125

Insurance corporations and pension funds

5 In the Czech Republic MBS, non-residents are broken down into the adjacent sub-sectors using a combination of sector codesand country codes (including international organisations).

S123Other financial intermediaries, except

insurance corporations and pension funds


Czech Republic

Banking activities may also be carried outin the Czech Republic by foreign banksthrough their branches, provided they haveobtained the necessary banking licence fromthe CNB.

Building savings banks (building societies) arealso established under the Act on Banks, buttheir activities are regulated by the additionalAct No. 96/1993 Coll. on Building Savingsand the State Grant for Building Savings (asamended).

Building savings banks (building societies)perform the following special activities inparticular:

• accepting deposits from participants inbuilding savings schemes;

• providing credits to participants in buildingsavings schemes;

• providing state grants to participants inbuilding savings schemes.

Credit unions (savings and loan co-operatives)are identified and included in sub-sector S122in accordance with the ESA 95, but they arenot part of the money-creating sector (seeTable 2.3). The situation in the credit unionssector is very unstable, and the number ofactive credit unions is declining constantly.As the amount of deposits with credit unionsis approximately only 0.1% of the total bankdeposits of the resident money holdingsector, the cutting-off-the-tail principle willbe applied to these institutions.

2.3.2 Definition of other monetaryfinancial institutions

Money market funds (mmFs) are identifiedand included in sub-sector S122. The volumeof units issued by money market funds, andhence the share of this sub-sector, has beenrising constantly over the last two years, andcurrently stands at approximately 4% of thetotal bank deposits of the resident moneyholding sector.

The national definition of MMFs should befully harmonised with the ECB definition inthe Czech legal system from 2004. However,the MMFs have already started to harmonisetheir statutes with the ECB definition.


In the Czech Republic there are no centralgovernment deposit liabilities of a monetarynature.


Bank deposits include any financial means (funds)entrusted to the bank that create an obligationon the part of the bank to repay such financialmeans (funds) to the depositor. The main kindsof deposit product are demand deposits,overnight deposits, term deposits (deposits withagreed maturity, deposits redeemable at notice),savings deposits (demand/overnight, redeemableat notice, with agreed maturity) and certificatesof deposit.

Credits are financial means (funds) in anyform granted temporarily by the bank todebtors. The main kinds of credit productinclude overdrafts, short-term, medium-termand long-term bank loans, includingrepurchase agreements, debt securitiespurchased in primary issues and not intendedfor trading, factored receivables and other


National central bank 1

Credit institutions 84Universal commercial banks 31Building savings banks(building societies) 6Credit unions(savings and loan co-operatives) 47

Other monetary institutions 13(money market funds)

Total 98



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current receivables (mortgages, receivablesof guarantees, etc.).

Securities issued by banks include bills ofexchange (deposit and other), bonds,mortgage bonds, other coupon debtsecurities and discount debt securities.

Transactions in securities (in the trading andbanking book) and financial derivatives onthe bank’s own account.

Domestic and cross-border payments andsettlements include simple payments, fixedpayment orders, collections of payments,documentary payments and collections,including open letters of credit, debit cards,credit cards and cheques.

Other main banking activities include foreigncurrency trading (including exchange services),the granting of guarantees, and hedging (againstforeign exchange risk or credit risk, etc.).

Other banking services include especiallysecurities trading on a client’s account, issuingsecurities for clients, financial brokerage (saleof insurance, units of mutual funds etc.,primarily from companies within the samebanking group), custody services and assetmanagement, business and banking consultancyservices and portfolio management.

2.5 Statistical balance sheets of themonetary financial institutions


The contemporary harmonised form of the“Monthly Assets and Liabilities Statement” (i.e.the balance sheet of the CNB and commercialbanks for MBS) has a seven-column structure.The data in the columns show:

• gross assets/liabilities items, total;

• gross assets/liabilities in CZK (residents,non-residents);

• gross assets/liabilities in EUR (residents,non-residents);

• gross assets/liabilities in other foreigncurrency (residents, non-residents).

The ECB rules have already been implemented.The balance sheet of banks consists mostly ofmore detailed items than set forth in RegulationECB/2001/13. These are used for analyticalpurposes and to crosscheck the partial balancesheet statistics statements against the basicbalance sheet. The main balance sheet items formonetary and banking statistics are:

On the assets side:

• cash (on hand)

• granted loans and placed deposits,comprising:

– deposits with and loans to central banksand loans to and other receivables fromother banks (debit balances on currentaccounts; loans to and term depositswith banks; operating funds in and longterm funds granted to foreign branches);

– loans granted to clients (non-financialorganisations, other financial and insuranceinstitutions, general government,households, non-profit institutions) forbusiness purposes, lending for housinginvestments, consumer credits, etc.,including debit balances on currentaccounts and bad loans;

• non-negotiable securities held by the bank;

• other debt securities held by the bank;

• money market fund units and shares heldby the bank;

• other shares and other equity held by thebank;

• fixed assets, consisting of the tangible andintangible assets of banks, includingacquisitions of such assets;


Czech Republic

On the liabilities side:

• currency in circulation;

• received deposits and loans, comprising:

– loans and deposits received from thecentral bank and deposits and loansreceived from other banks (creditbalances on current accounts, loansreceived from and term deposits ofbanks, operating funds received frombranches and subordinated loans anddeposits received from banks);

– clients’ deposits (including deposits fromgeneral government);

– loans received from clients (includingloans received from general governmentand subordinated loans);

• non-negotiable securities issued by thebank;

• other debt securities issued by the bank;

• capital and reserves, i.e. amounts arisingfrom the issue of equity capital, reservesand provisions, funds from profits, capitalfunds and profits and losses;

On both the assets side and the liabilities side,the main items given above are supplementedwith other assets and other liabilities. Thesecomprise remaining items such as the fair valueof derivatives, other receivables/liabilities to legaland natural persons, differences on the valuationof granted/received loans and deposits andsecurities held by the Bank, and on the assetside, also inventories, gold, other cash andprecious metals.

Notes:

1. In 2002, money market debt securitieswere monitored separately on both the assetsside and the liabilities side; as from the startof 2003, they are now included under otherdebt securities in compliance with RegulationECB/2001/13.

2. Repo funds are included under loansgranted or received. Underlying securitiesused as collateral in repos remain in theownership (on the balance sheet assets) ofthe original holder, while the temporaryacquirer presents these securities in the off-balance sheet.

2.5.2 Breakdown of the main balancesheet items by instrument/maturity,counterparty and currency

The breakdown of the main balance sheetitems is designed to cover fully therequirements of Regulation ECB/2001/13. Thenational requirements go beyond what isrequired by the ECB.

The main breakdowns are as follows:

• sector according to the ESA 956;

• maturity;

• currency;

• branch according to CZ-NACE (clients’loans and deposits only)6;

• type of loans, deposits, securities.


2.6.1 Definition of money and breakdownof monetary aggregates byinstrument

Since the beginning of the 1990s, the CNBhas been using the monetary aggregates M1and M2. The aggregate L was added later. Allthree aggregates are still in use and aredefined as follows:

6 An additional breakdown used only for national purposes.


Czech Republic

Since 2002, the CNB has also been compilingharmonised monetary aggregates inaccordance with the ECB methodology, basedon the balance sheet compiled in accordancewith Regulation ECB/1998/16 (from 2003, inaccordance with Regulation ECB/2001/13).


The following negotiable instruments are onlyissued by monetary financial institutions:

• currency in circulation, i.e. cash in CZKheld by the business sector andhouseholds, excluding cash held atcommercial bank cash counters and at theCNB, is not divided into sectors;

Box 1

M1 includes:

– Currency in circulation

– Demand deposits in domestic currency

M2 includes:

– M1

– Time deposits 7 in domestic currency

(including certificates of deposit)

– Deposit bills of exchange and similar securities

– Foreign currency deposits

L includes:

– M2

– Short-term securities (T-bills, CNB bills) held

by non-banks

7 Term deposits and loans received from clients.

• certificates of deposit, i.e. residents’ CZK-denominated deposits in the bankingsystem with agreed maturity repayable totheir holders, are divided into thecommercial sub-sectors, households andnon-residents sectors according to the realor the first holder;

• residents’ deposits in securities, i.e. depositbills of exchange and similar securities, aredivided into the commercial sub-sectors,households and non-residents sectorsaccording to the real or the first holder;

• negotiable debt securities issued, i.e. bondsetc., are divided into the main commercialsectors, households and non-residentsmostly according to the real holder.


Czech Republic


Credits to domestic residents are brokendown by type, maturity (up to one year, overone year and up to four years, over fouryears) and sector (business sector, insurancecompanies, households).

Since 2002 the CNB has also compiledcounterparts to the harmonised monetaryaggregates in accordance with the ECBmethodology, based on the balance sheetcompiled in accordance with Regulation ECB/1998/16 (from 2003, Regulation ECB/2001/13).

2.8 Reserve money

The monetary base (i.e. reserve money)includes currency in circulation and thereserves that commercial banks hold in theiraccounts with the central bank. Both theseitems represent the use of the monetary base.

Box 2Total net foreign assets

Balance of short-term and long-term assets and liabilities of the banking system vis-à-vis non-residents.

Total net domestic assets

Difference between liquid liabilities and net foreign assets. Net domestic assets consist of:

– Domestic credits, including funds injected into the economy by the banking sector:

– net credit to the government, i.e. the difference between assets and liabilities of banks vis-à-vis the

government sector;

– net credit to the National Property Fund (NPF), i.e. the difference between assets and liabilities of banks

vis-à-vis the NPF;

– credits to business and households, i.e. CZK credits granted by the banking system to residents, broken

down into the business sector and households;

– credits in foreign currency, i.e. foreign currency credits granted to residents by the banking system,

broken down into businesses and households.

– Other net items, i.e. the difference between other liabilities and other assets within the banking system.

Other liabilities mainly include equity capital of banks, all items connected with profit creation (such as

reserves, reserve funds and current year profits) and items derived from accounting processes. Other assets

include, in particular, purchased securities in bank portfolios, bank funds invested in property (such as

buildings), losses in the current year and items arising from accounting processes. Other net items are

shown as negative items in net domestic assets.

The monetary base expresses the relationsof the central bank towards the other sectorsof the economy. Therefore, the counterpartsof the monetary base represent the externalsector, the government sector, the bankingsector and the private sector. These factorsthat influence the level of the monetary baseare designated as the sources of the monetarybase.

A basic breakdown of the items in themonetary base is as follows:

Assets:– External sector in total

– Net credit to the Government (excludingsecurities)

– Credits to the economy

– Net other assets


Czech Republic

• Volume of sterilisation

• Refinancing credits

• Standby facilities

– Lombard repo (lending facility)

– O/N deposit (deposit facility)

– Intraday credit.

Liabilities:• Currency in circulation

• Reserves of banks

• Required minimum reserves

• Excess reserves, which represent thedifference between the prescribed and realvolume of the required minimum reserves.



The powers of the CNB to collect data areset forth in Act No. 6/1993 Coll. (asamended) on the CNB. The Czech NationalBank is empowered under this Act to requestinformation from banks and branches offoreign banks. The harmonised Act on theCNB gives the CNB more regulatory powersto request information, also from non-bankinstitutions, both for the banking andmonetary statistics and in order to undertakeits other tasks.

The CNB is authorised under the Act torequest more detailed information or anexplanation if the information submitted by

reporting agents does not comply with therequired methodology or conditions, or ifwell-founded doubts arise concerning theaccuracy or completeness of suchinformation. The CNB is also authorised toorder banks, branches of foreign banks andother reporting agents to rectify defects andto impose a fine on the agent concerned if itfails to submit the required information or ifsuch information is repeatedly incorrect orincomplete.

The CNB is the sole collecting agent in theCzech Republic, collecting all data from thebanking sector to complete the monetarystatistics. No other financial institutions havesubmitted data to the CNB for this purposeyet.

The CNB also collects statistical informationfrom entities other than banks, primarily forb.o.p. statistics. The CNB’s powers in thisarea are based on the Foreign Exchange Actand on the new amendment to the Act onthe CNB.


As stated in sections 2.3.1 and 2.3.2, theactual reporting population currentlycomprises only banks and branches of foreignbanks. The CNB plans in the first half of 2003to start collecting basic necessary informationfrom money market funds on a voluntary basisfor testing, and in 2004 to introduce regularcollection of data from such funds pursuantto a decree drafted and issued by the CNB.The cutting-off-the-tail principle will beapplied to credit unions, and the CNB willcarry out a grossing-up procedure using thedata on these institutions collected by theCSO.


Czech Republic



all the institutions)

CNB 1 100 23.5


Universal commercial banks 31 100 71.3

Building savings banks (building societies) 6 100 5.2

Other monetary institutions - - -

Total 38 - 100



Reporting system for banks

The money-creating sector in the CzechRepublic consists of the CNB and 37commercial banks (including six buildingsavings banks, as well as branches of foreignbanks). The reporting population formonetary and banking statistics is confinedto these banks (see Table 5).

The Monetary and Statistics Department ofthe CNB collects statistical data from banksand branches of foreign banks in the followingareas:

A. Balance sheet statistics (Stocks):

a) Balance sheet – a complete monthly assetsand liabilities statement creating the overallframework for MBS (includingsupplementary data for the foreignexchange and CZK position of the bankfrom January 2003). The reportingfrequency of this statement is monthly. Thedata are collected electronically 15calendar days after the end of thereference period (for the months ofJanuary to November), and 31 days afterthe end of December.

b) Credit and deposit statistics:

These statistics comprise the followingstatements:

• Monthly statement on clients’ loans andreceivables from clients;

• Monthly statement on deposits and loansreceived from clients;

• Monthly statement on interbank loans anddeposits.

The reporting frequency and timeliness arethe same as for the balance sheet statement.The data are collected electronically.

c) Securities statistics:

• statistics on securities issued by banks areprovided in the report entitled “Monthlystatement on securities issued by banks”;

• statistics on securities held by banks areprovided in the report entitled “Monthlystatement on securities and participationsheld by banks”.

The data are collected electronically. Thereporting frequency and timeliness are thesame as for the balance sheet statement.


Czech Republic

d) Territorial breakdown of assets andliabilities:

This comprises the following statementimplemented in 2002:

• Quarterly statement on selected assets andliabilities broken down by country.

The data are collected electronically 25calendar days after the end of the referenceperiod (for the first three quarters) and 31days after the end of December.

B. Balance sheet statistics (Flows)


• Monthly statement on write-offs of loansand other receivables (implemented andtested since September 2002, and fromthe beginning of 2003 collected on aregular basis);

• Monthly statement on price revaluation ofsecurities (implemented and tested fromthe beginning of 2003);

The reporting frequency of these statementsis monthly. The data are collectedelectronically on the first day of the secondmonth after the end of the reference period(for January to November) and 41 days afterthe end of December. After the testing iscompleted, the time limits for submittingthese statements for January to Novemberwill be shortened to 20 (and later to 15) daysafter the end of the reference period, whilethe time limit for submitting the Decemberstatement will be reduced to 31 days afterthe end of December.

C. Interest rate statistics


• Monthly statement on the stock of loansand deposits broken down by interest rate;

• Monthly statement on new loans brokendown by interest rate.

The reporting frequency of these statementsis monthly. The data are collectedelectronically 17 days after the end of thereference period (for the months of Januaryto November) and 31 days (for new loans 17days) after the end of December.

D. Foreign exchange statistics

The most important foreign exchangestatistics statements are:

• Monthly statement on foreign exchangeand CZK payments and collections;

• Quarterly statement on foreign exchangeand CZK payments and collections interritorial breakdown;

• Quarterly statements on foreign securitiesheld by banks and other residents and ondomestic securities held by non-residents.

The data are collected electronically, eithermonthly or quarterly, 17 or 20 days after theend of the reference period (for January toNovember, and for some of the statementsfor December as well) and 31 or 36 daysafter the end of December.

Note: up to the end of 2002, data for themonthly statement on the foreign exchangeand CZK position of all banks were collected.As from the start of 2003, it will be compiledin the CNB from data reported by banks inthe other statistical statements for monetarystatistics submitted to the CNB.

The statements are prepared in accordancewith the Czech Act on Accounting and withthe Chart of Accounts and Accounting Rulesfor Banks and Some Other FinancialInstitutions set down by the MoF of the CzechRepublic.

The statements referred to in A and B abovehave been restructured or newly introducedso that they provide all the necessary data


Czech Republic

for the harmonised balance sheet statisticspursuant to Regulation ECB/1998/16 and, asfrom the start of 2003, pursuant to RegulationECB/2001/13. This has enable the relatedcompilation of harmonised monetaryaggregates and counterparts. The CNB hasbeen able to compile Table 1 of ECB/1998/16as of January 2002 (from 2003 pursuant toECB/2001/13); preparatory work on thecompilation of the other tables (stocks) ofthe above regulation is in progress.

The statements on interest rate statistics arecompiled in accordance with the nationalmethodology laid down by the CNB. This hasnot yet been harmonised with RegulationECB/2001/18.

Reporting system for money market funds

(see Chapter 2.9.2)


The balance sheet of the CNB for MBS coversthe same items as the balance sheets forcommercial banks, together with other itemsspecific to central banks (currency incirculation, gold reserves, monetaryreceivables and liabilities, and receivables andliabilities vis-à-vis the IMF). The CNBcompiles statements on loans, deposits andsecurities in the same structures and termsas commercial banks.

Data for the CNB balance sheet and the otherstatements are taken automatically from thecentral bank’s centralised accountingdatabase.

The statistical statements and accountingrecords are prepared in accordance with theAct on Accounting, the Chart of Accountsand Accounting Rules for Banks prescribedby the MoF of the Czech Republic, and theECB and IMF requirements for MBS.

The CNB also compiles balance sheets forvarious other internal and external purposes.

A summary accounting balance sheet ispublished at ten-day intervals and annuallythrough press agencies and on the CNB’swebsite.



All collected data are provided as end-of-period stock data or flow data within thereference period.

2.10.2 Revisions

The data are published at regular intervals(usually monthly) and are valid for all of thesubsequent period. The data have to becomplete (i.e. include data from all reportingagents) and have to meet all the prescribedstandards of acceptability for data reportedby banks to the CNB.

Banks are obliged to submit corrected data ifany mistakes or errors are detected by theCNB. They are also obliged to send to theCNB revised data for selected statements(including the balance sheet) for the annualaccounting audit. Banks may also reviseincorrect data at their own discretion.

Most of the data referring to the elapsedperiod are presented as final data, apart fromin the monetary survey, where more precisefigures are given for some items two or threemonths after their first presentation. If banksrevise MBS data after such data have beenpublished for the first time, any changes tothe data will only appear in time series insubsequent publications. Revisions ofpublished data are usually supplemented byexplanatory notes.


2002 saw the completion of preparatory workfor data collection and the overall concept of


Czech Republic

compilation of the balance-sheet flowstatistics derived from the MFI balance-sheetstock statistics in compliance with RegulationECB/2001/13. Two new monthly statementssubmitted by banks and branches of foreignbanks were introduced (Monthly statementon write-offs of loans and other receivables,Monthly statement on price revaluation ofsecurities – see 2.9.3). These are used toobtain data on revaluation adjustments. Datafrom these statements are initially beingcollected in a testing regime; full changeoverto the standard reporting regime is envisagedfor mid-2003. Collection of flow statisticsdata from money market funds in compliancewith Regulation ECB/2001/13 is not currentlyunder consideration.

The data needed to monitor exchange ratechanges in line with ECB methodology areavailable from the present system of balance-sheet stock statistics (which contains all datarelating to loans, deposits and securitiesbroken down by currency). Giventheir nature, reclassifications and otheradjustments will be determined on an ad hocbasis, partly from the current MBS statementsand partly from additional informationobtained from individual banks and branchesof foreign banks.

The first balance-sheet flow statistics shouldbe available in or around mid-2003 (withreference to January 2003), when the testingphase will have been completed and thequality of the data verified.


The Monetary Department makes seasonaladjustments to reserve money and creditissuance data in the banking statistics.However, these adjusted time series data arenot published regularly, except for theincrement in the national monetary aggregateM2 and the increments in adjusted credits ininflation reports.

The adjustment procedure covers seasonalfactors, which are calculated as average

relative deviations from the series, smoothedby the centred average method. These factorsare checked once every two years and, in theevent of significant changes, corrections aremade.

Seasonal adjustment is applied for analyticalpurposes. The current method was chosenbecause of its simplicity. More complexmethods – such as X-12-ARIMA and TRAMO-SEATS – have been tested with similar results.The regular official publication of seasonallyadjusted data is under preparation.

2.11 Publications

2.11.1 First release of data (includingpublishing medium)

The CNB publishes data on monetary andbanking statistics as follows:

• Analytical accounts of the banking sector– a monetary survey comprising monthlynational monetary aggregates M0, M1, M2and extended M2-L, net domestic creditto general government and to the rest ofthe economy and the net external position.The sources for this are the balance sheetsof banks. The data on national monetaryaggregates are final when first released.Data on all other components areprovisional when first released and becomefinal after 90 days. The data are firstpublished as a press release – by fax, onhard copy and electronically on the CNB’swebsite at http://www.cnb.cz. The time ofpublication is one month after the end ofthe reference month, except forDecember, when the time lag is twomonths owing to end-of-year closing ofaccounts. The data form part of the ARADdatabase (i.e. the time series database),which can be accessed via the CNBwebsite.

• Analytical accounts of the Central Bank –monetary base comprising each month (i)the monetary base (currency in circulationand bank reserves held on central bank


Czech Republic

accounts); (ii) net domestic claims on/liabilities to general government; (iii)domestic credit to the rest of theeconomy; (iv) net external position. Thesources for this are the accounting recordsof the CNB. The data are final when firstreleased and are not revised. The data arefirst published as a press release availableby fax, on hard copy and electronically onthe CNB website. The time of publicationis 15 days after the end of the referencemonth.

• Harmonised balance sheet statistic,comprising:

– the balance sheet of the CNB and theaggregated balance sheet of other MFIs/banks (assets, liabilities),

– the consolidated balance sheet of theMFI/banking sector (assets, liabilities),

– monetary aggregates and counterparts.

The structure of the harmonised balancesheet statistics corresponds to the tablespublished in the ECB Monthly Bulletin. Thedata are published within the first ten days ofthe second following month after the end ofthe reference month. As from January 2003,these data will be available on the CNBwebsite.


• The monthly publication “BankingStatistics” gives an overview of the balancesheet of commercial banks, the month-endstocks of deposits and loans, and interestrates. The data are sourced from themonthly statements submitted by the banksto the CNB, and are published six weeksafter the end of the relevant month inelectronic form on the CNB website. Thedata are not corrected retrospectively.

• The ARAD time series database offers themost comprehensive summary of currentstatistical data from the three thematicareas (the monetary area – bankingstatistics; state statistics – CSO data; andthe b.o.p. statistics). The data are regularlyupdated (on a monthly basis) and are notdefinitive. The data are published onemonth after the end of the relevant monthon the CNB website.


Part 7 of the “Statistical Yearbook of theCzech Republic”, published by the CSO,contains detailed annual data on MBS. Thesources of data are the same as for the MBSin the CNB. The yearbook is an official recordof the Czech Republic’s statistics and is alsoavailable for a fee on CD-ROM. It is usuallypublished in November of the subsequentyear.

3 Contacts at the Czech National Bank


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]

‹

CZECH NATIONAL BANK, NA PRÍKOPĚ28, 11503 PRAHA 1Monetary and statistics departmentMoney and banking statistics divisionMr Zbynek KARNET,tel: +420/22441 4446fax: +420/22441 2147 or +420/22441 2136e-mail: [email protected]


Czech Republic

Organisation chart of the Czech National Bank

Annex 1411 - M

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DEPARTMENT

EXECUTIVE DIRECTOR

GOVERNOR VICE-GOVERNOR VICE-GOVERNOR

130 - Internal Audit andControl Department

Executive Director

HEADQUARTERS

Bank Board direct

management axis

Authorisation of Bank Board members to oversee the

CNB’s major activities


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411 - - MONENETARYRY P POLICY

DIDIVISION

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41412 -2 - MONENETATARY ANARY ANALYSEYSES

AND PUBND PUBLIC F FINANCENCE

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A ANALYSESSES DI DIVIVISISION

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PROCESSESSING DI DIVISISIONON

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STATISTICSCS DE DEPARTRTMENTNTEXECUTUTIVE DI DIRERECTOR

DEPUPUTY EX EXECUTIVE DE DIRECTOR

511 - - B BANKING ME METHODOLODOLOGOGY

DIDIVISION

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512 - - BAN BANKIKING A ANALYSES

DIDIVISION

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REREGULATION

DEDEPARTMENTEXECUTIVE DIRECTOR

521 - - O OFF-SITE B BANKINING

SUPERVISISIOION DIVISION 1 1

DIDIRECTCTOR

522 - - O OFF-SITE B BANKINING

SUPERVISISIOION D DIVISION 2 2

DIDIRECTCTOR

523 - O ON-S-SITITE B BANKINING


DIDIRECTCTOR

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DEPUTY EXECUTUTIVE DI DIRECTCTOR

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SUPERVISION

DEDEPARTRTMENTEXECUTCUTIVE DI DIRERECTCTOR

611 - OPERATIONS ANALYSES

DIVISION

DIRERECTOROR

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DEPUTDEPUTY E EXECUXECUTIVE D DIRECTRECTOROR

613 -613 - R RESESERVES MES MANAGEMGEMENTNT

DIDIVIVISISIONON

DIRERECTCTOROR

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DEDEPARTRTMEMENTEXECUTCUTIVE DI DIRERECTCTOR

621 -621 - TRA TRANSACSACTITIONS SYSTEM SYSTEMS

DIDIVIVISISIONON

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622 -622 - RISK MANAGEMENT

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SESETTLTTLEMEMENENTSTS D DIVIVISIONON

DIDIRECTCTOROR

620 - RI RISK MANANAGEMEMENT

AND TND TRANSACTCTIONS

SUSUPPOPPORT DEPAEPARTMENTEXECUTCUTIVE DI DIRERECTOR

321 - CA CASH CIRCRCULULATION

DIDIVISION

DIDIRECTCTOROR

322 - - P PAYMEMENT ME MEDIDIA

PROPROTECECTION DION DIVISISION

DIDIRECTCTOROR

323 -323 - PAYM PAYMENT S SYSTEMYSTEMS

POLPOLICY ANDCY AND DEVE DEVELOPMPMENENT

DIDIVIVISISION

DI DIRECRECTOROR

320 -320 - CASHSH AN AND PA PAYMENT

SYSYSTSTEMEMS DS DEPARTMENTEXECUTCUTIVE DI DIRERECTCTOR

DEDEPUTY E EXECUTCUTIVE DI DIRERECTCTOR

111 - BANK BOARD

SECRETARIAT

DIRECTOR

112 - COMMUNICATIONS

DIVISION

DIRECTOR

113 - EU AND INTERNATIONAL

ORGANISATIONS

DIVISION


114 - LEGAL SERVICES

DIVISION

DIRECTOR

110 - GENERAL

SECRETARIAT

EXECUTIVE DIRECTOR

121 - PERSONNEL DIVISION

DIRECTOR

122 - STAFF PROFESSIONAL

DEVELOPMENT AND SOCIAL

POLICY DIVISION


120 - HUMAN

RESOURCES

DEPARTMENTEXECUTIVE DIRECTOR

221 - ACCOUNTING

METHODOLOGY

DIVISION


222 - BUDGET DIVISION

DIRECTOR

223 - CENTRAL ACCOUNTING

DIVISION

DIRECTOR

220 - BUDGET

AND ACCOUNTING


721 - INFORMATION

TECHNOLOGY DEVELOPMENT

DIVISION

DIRECTOR


DEVELOPMENT DIVISION


723 - SYSTEMS SUPPORT

DIVISION

DIRECTOR

724 - INFORMATION

TECHNOLOGY SECURITY

DIVISION

DIRECTOR



DIRECTOR


OPERATION DIVISION

DIRECTOR

720 - INFORMATION

SYSTEMS


421 - PREMISES



422 - BUSINESS DIVISION

DIRECTOR

423 - TECHNOLOGICAL

DIVISION

DIRECTOR

424 - INTERNAL SUPPORT

SERVICES DIVISION

DIRECTOR

425 - BANK SECURITY

DIVISION

DIRECTOR

426 - CNB SOCIAL FACILITIES

DIVISION

DIRECTOR

420 - ADMINISTRATION

DEPARTMENT

EXECUTIVE DIRECTOR

CHIEF EXECUTIVEDIRECTOR




140 - EconomicResearch Department

Executive Director

150 - Crisis Management and Classified InformationProtection Department

Executive Director

BANK BOARD


Czech Republic

Estonia


Estonia


BIS Bank for International Settlements


BSAD Banking Statistics and Analysis Department

ECDS Estonian Central Depository for Securities

EEK Estonian kroon

EMTAK Classification of the National Economy of Estonia

EUR euro

FSA Financial Supervision Authority

FSSD Financial Sector Statistics Division

GFS government finance statistics

HICP Harmonised Index of Consumer Prices




MFI monetary financial institution


NACE Statistical Classification of Economic Activities in the European Union


SLA savings and loan association

SOE Statistical Office of Estonia

TALIBID Tallinn interbank bid rate

TALIBOR Tallinn interbank offer rate


Estonia




According to the Law on the Central Bank ofthe Republic of Estonia, the Board of theBank of Estonia is the highest organisationalbody of the Bank of Estonia, consisting of theChairperson and eight members. The Boardis appointed by the Parliament.

The Governor of the Bank of Estonia isappointed by the President of the Republic ofEstonia.

The executive management of the Bank ofEstonia consists of three Deputy Governors.The Bank of Estonia’s departments aredivided into three groups, each supervised byone of the Deputy Governors.

See Annex 1.


Two departments are engaged in statisticalwork at the Bank of Estonia: the StatisticsDepartment, and the Financial SectorStatistics Division (FSSD), which is a sub-department of the Financial StabilityDepartment. The FSSD is responsible formoney and banking statistics.

The Statistics Department is divided into twodivisions: the Balance of Payments StatisticsDivision and the Economic Statistics Division.


The main national laws, regulations andspecific provisions that provide theframework for the activities of the Bank ofEstonia are:

• the Constitution of the Republic of Estonia,effective from 3 July 1992, Articles 65, 74,78, 104, 111 and 112(http://www.rk.ee/rkogu/eng/epseng.html);

• the Law on the Central Bank of theRepublic of Estonia, effective from 18 June1993(http://www.ee/epbe/norm/index_green.html.en);

• the Credit Institutions Act (which providesthe legal basis for the establishment,activities and dissolution of creditinstitutions and the principles and legalbasis for the supervision of creditinstitutions), latest version effective from1 July 1999(http://www.legaltext.ee);

• the Law of the Republic of Estonia on theSecurity of the Estonian kroon (EEK),effective from 20 June 1992(http://www.ee/epbe/norm/index_green.html.en);

• the Currency Law of the Republic ofEstonia, effective from 20 June 1992(http://www.ee/epbe/norm/index_green.html.en);

• the Statutes of the Bank of Estonia,effective from 4 September 1996(http://www.ee/epbe/norm/index_green.html.en); and

• the Official Statistics Act, effective from17 July 1997(http://www.legaltext.ee/).

• the Financial Supervision Act, effectivefrom 1 June 2001(http://www.legaltext.ee/)


Estonia




The Bank of Estonia is the central bank of theRepublic of Estonia. It is independent from allgovernment agencies and reports only to theParliament; it is not subordinated to theGovernment of the Republic of Estonia or toany other executive institution of the State.The Bank of Estonia is entrusted withimplementing all the measures at its disposalto increase confidence in the Estonian kroon(EEK) and in the stability and integrity of theEstonian monetary system both at home andabroad.


The objectives and tasks of the Bank ofEstonia are defined by the Constitution ofthe Republic of Estonia and the Law on theCentral Bank of the Republic of Estonia. Themain objective of the Bank of Estonia is toensure the stability of the EEK and its abilityto fulfil all functions as a means of money. Inaddition, the Bank of Estonia has tocontribute to the stability of both the bankingsector as well as the whole financial system,to maintain the integrity and efficiency of thebanking system, and to promote thedevelopment of financial markets. In otherareas, the Bank of Estonia goes beyond thescope of these targets to support economicgrowth and general welfare. One of theprimary goals of the Bank of Estonia is tomeet the currency needs of the public.Pursuant to the Law on the Central Bank ofthe Republic of Estonia, the Bank of Estoniais the sole legal issuer of banknotes and coinsin Estonia. The EEK is the legal tender ofEstonia.

Starting from the beginning of 2002,supervision of credit institutions wasseparated from the Bank of Estonia andtransferred to the newly established Financial

Supervision Authority (FSA) - an agency withautonomous competence and a separatebudget.

The Bank of Estonia participates in theeconomic policy of Estonia by conductingindependent monetary and financial policies.It also advises the Government on matters ofmonetary and financial policy. On theauthorisation of the Government, the Bankof Estonia officially represents Estonia in theinternational monetary, credit and bankingorganisations of which Estonia is a member.In accordance with its mandate, the Bank ofEstonia supports the economic policy of theGovernment of Estonia to the extent thatthis policy does not conflict with its duty tomaintain the stability of the national currencyand its other mandates as set forth in theLaw on the Central Bank of the Republic ofEstonia. The Bank of Estonia holds allEstonia’s gold and precious metal reservesand foreign currency reserves and providesdirections for their use. The Bank of Estoniacompiles the balance of payments (b.o.p.) forEstonia.



• The main responsibilities of the Balance ofPayments Statistics Division are to compilethe b.o.p. and the international investmentposition (i.i.p.) of the Republic of Estonia.The Bank of Estonia compiles and publishesmonthly and quarterly b.o.p. accounts onthe basis of a number of informationsources. It makes some value correctionsto the Statistical Office of Estonia (SOE)statistics on external trade of goods andundertakes the conversion from cost,insurance and freight at the importer’sborder (c.i.f.) to free on board at theexporter’s border (f.o.b.) for imports. TheBank of Estonia uses the tourism figures


Estonia

from border surveys and other tourismstatistics, and conducts quarterly surveysof the principal Estonian enterprises andother bodies involved in external tradeand capital flows. International receiptsfrom the non-bank sector are collected viacommercial banks. The Bank of Estoniaalso makes use of other information, inparticular international data. The b.o.p. andthe i.i.p. are released in accordance withthe IMF’s Special Data DisseminationStandard (SDDS).

• The Economic Statistics Division isresponsible for gathering, systematising anddistributing general economic statistics(excluding banking statistics) about Estoniaand other countries for both in-house useand publication, as well as for compilingperiodical and occasional statisticaloverviews of the Estonian economy.

• The Financial Sector Statistics Division’sresponsibilities arise from the needs of fivegroups of customers for financial sectordata: internal users of the Bank of Estoniawho support monetary and financialstability; the Financial SupervisoryAuthority (FSA), which supervises thebanking sector; international organisations(mainly the IMF, Eurostat and the ECB);the general public; and initial dataproviders. In order to meet theexpectations of these customers, the FSSDin co-operation with FSA carries out thefollowing main tasks: determining andestablishing requirements for the reportingof financial institutions; elaborating,implementing and improving reportingpackages; collecting, processing andanalysing the reports; providing regularoverviews of and operative data on theprocessed and analysed reports to themanagement of the Bank of Estonia;compiling requested data for the IMF,Eurostat and the ECB; preparing bankinginformation for dissemination; andproviding the SOE with required data onfinancial sector and leasing companies.


The Statistical Office of Estonia contributesto all official surveys except the b.o.p. andmonetary and financial statistics.

According to the Official Statistics Act,Section 2, the main objectives of the SOE areto compile and co-ordinate official statistics.In the field of macroeconomic statistics, theSOE compiles the quarterly and annualnational accounts. It is also responsible forcompiling the annual financial account. Inaddition, the SOE provides data on severalprice indexes, such as the Harmonised Indexof Consumer Prices (HICP), the producerprice index of industrial output, the exportprice index, the import price index and theconstruction price index.

The SOE meets the requirements for theHICP – as per Commission Regulation No.1749/96/EC of 9 September 1996 on initialimplementing measures for CouncilRegulation (EC) No. 2494/95 concerningharmonised indices of consumer prices – aswell as the Eurostat timetable for calculatingand publishing the HICP. The SOE and theMinistry of Finance share the task of compilingthe government finance statistics (GFS). TheMinistry of Finance collects information fromthe institutional units and compilesgovernment finance statistics according to theIMF’s GFS. The Bank of Estonia provides theSOE with the b.o.p. and monetary statisticsfor macroeconomic calculations.

Data from credit institutions, mutual funds,investment firms, insurance corporations andpension funds and fund managers arecollected by the FSA.


See Table 1.


Estonia

Table 1



and counterparts

Collected data

Collecting agents

Description

Interest rates and amounts of loans granted and depositstaken during the reporting month and amountsoutstanding on a monthly basis. Timeliness: fifthbanking day after the end of the reporting month.

Tallinn interbank offer rate (TALIBOR)/Tallinninterbank bid rate (TALIBID) with quotation periods ofone, three and six months.

Data on issued securitiestraded on the secondarymarket are availablefrom the securitiesregister, via the websiteof the Estonian CentralDepository for Securities(ECDS). The register isupdated as a new issue isregistered.

Securities issued bycredit institutions arealso reflected in creditinstitutions’ balancesheets.

FSA in co-operation with theBank of Estonia

FSA in co-operation with theBank of Estonia

ECDS

Users Bank of Estonia

FSA

SOE

International organisations(IMF, Eurostat, ECB)

General public

Bank of Estonia

SOE

International organisations (IMF, Eurostat, ECB)

General public

Bank of Estonia

General public

Credit institutions’ data areprovided electronically (mainlyby e-mail) according to specialelectronic reporting proceduresdefined by the FSA and FSSD.

Credit institutions’ additionalreports include breakdowns ofmain balance sheet itemsaccording to residency, customersector, currency and originalmaturity.

SLAs’ data are provided via e-mail.

Data are collected electronically (mainly by e-mail)according to special electronic reporting proceduresdefined by the FSA and FSSD.

Interest rates are calculated as a weighted average of theinterest rates reported by each credit institution. Themean is weighted by the amounts of new credit grantedor deposits attracted during the reporting period.

TALIBOR is calculated using the standard LIBORlogic.

Credit institutions’ balance sheetdata on the 10th and 20th day ofthe month and at the end of themonth. Timeliness: secondbanking day after the 10th andthe 20th days of the month; fifthbanking day after the end of thereporting month.

Credit institutions’ additionaldetailed reports on stocks ofloans, deposits and securities on amonthly basis. Timeliness: fifthbanking day after the end of thereporting month.

Balance sheets of the two biggestsavings and loan associations(SLAs) on a monthly basis.Timeliness: 10th banking dayafter the end of the reportingmonth.


Estonia

Table 1 (continued)


Collected data

Collecting agents

Users

Special reserve reportrequired for creditinstitutions which is basedon balance sheet and off-balance sheet data.

Data are collected on amonthly basis.

Bank of Estonia SOE

SOE, in co-operation withthe Bank of Estonia in thefield of banking sector andleasing companies’ data.

Bank of Estonia Bank of Estonia

FSA

Bank of Estonia Bank of Estonia

General public

Bank of Estonia

FSA

Statistical surveys forenterprises on an annualbasis.

Central Business Register.

Government agenciesincluding the Ministry ofFinance and the FSA.

ECDS.

Bank of Estonia in the fieldof banking and b.o.p. data.

Monthly customs statisticson exports and importsbroken down by country aswell as by type of goods.

Surveys of about 2,500enterprises on a quarterlybasis.

Non-bank foreign paymentsorders from creditinstitutions twice a month.

Sample surveys and datamodelling are used as wellas individual areas of theb.o.p.

The b.o.p is compiled onboth a monthly and aquarterly basis. Timelinessfor monthly b.o.p is 6 weeksafter the end of thereference month, and 10weeks after the end of thereference quarter forquarterly b.o.p.

For prudential purposes, theFSA receives, on anindividual as well as on aconsolidated basis, a verywide range of data fromcredit institutions (detailedbalance sheet data includingnon-performing loans, profitand loss accounts, data onoff-balance sheettransactions, prudentialratios including capitaladequacy, liquidity, largeexposures, creditinstitutions’ investments,etc.).

Data on an individual basisare provided by creditinstitutions, generally on amonthly basis with a timelag of five to seven bankingdays. Consolidated data areprovided on a quarterlybasis, two months after theend of the reporting period.

Different kind of data frominsurance companies,mutual funds, investmentfirms and fund managers arealso collected by the FSA.

International organisations(IMF, Eurostat, ECB etc.)


Estonia

Table 1 (continued)


Description Data are submittedelectronically.

The reserve requirementcurrently amounts to 13% ofthe reserve base, i.e. banks’deposits, debt securitiesissued by banks, netliabilities to foreign creditinstitutions and financialguarantees to financialinstitutions and non-residentcredit institutions.

The compilation of Estonianfinancial accounts is in theearly stages ofdevelopment. Althoughfinancial accounts arecurrently a priority for theSOE, special proceduresand systems for compilationhave not yet beenintroduced. Financialaccounts compiled untilnow have been provisional,although they are publishedregularly.

No balancing/cross-checking techniques areused.The customs data formerchandise trade areadjusted by the Balance ofPayments StatisticsDivision: an adjustment ismade for unidentifiedimports, and goodspurchased abroad fortransportation vehicles andrepair works on capitalgoods abroad are also added(information is obtainedfrom the enterprise survey).

Data on foreign assistanceare only available on anannual basis. For thequarterly b.o.p. theassessment method is used.After the end of thereporting year, the quarterlydata on foreign assistanceare adjusted so that the sumthereof is equal to theknown annual totals.

There is insufficientinformation available aboutthe foreign accounts ofprivate individuals, so theBank for InternationalSettlements’ (BIS) statisticsare used to estimatetransactions.

Information about theincome and expenditure offoreign embassies, etc. inEstonia is based onassessments.

Data on trade creditoriginate mainly fromenterprise surveys, althoughthe assessment method isalso used.

The threshold for foreignpayments is EEK 100,000(Estonia has a fixedexchange rate of EUR 1 =EEK 15.64664).

The b.o.p. and i.i.p. arecompiled on an accrualbasis using market prices.

Credit institutions’ data aresubmitted electronically tothe FSA. The FSA thenmakes the data available tothe Bank of Estonia via thedatabases.

Insurance companies’ dataare provided on hard copyas well as via e-mail.

Security market data areprovided on hard copy.


Estonia




Article 90 (5) of the Credit Institutions Actstates that credit institutions are required toprepare reports and submit them to the FSApursuant to the procedures established bythe Bank of Estonia.

According to Article 91 of the CreditInstitutions Act, the Bank of Estonia has thepower to set out the list of reports to besubmitted, and the regularity of submissionand methods of preparation thereof.

The full text of the main Bank of EstoniaDecrees concerning the reporting of creditinstitutions can be found on the Bank ofEstonia’s website, at http://www.ee/epbe/norm/index_green.html.en.


Balance sheets of the central bank and of thecommercial banks are prepared on the basisof their books, which are mainly kept inaccordance with the International AccountingStandards.

Banking and monetary statistics are compiledin accordance with the ESA 95, the IMF’sManual on Monetary and Financial Statistics,the IMF’s SDDS and European Central Bankrecommendations with respect to bankingstatistics.

In order to publish data in compliance withthe internationally recognised classifications,credit institutions in Estonia are requiredto use the Classification of the NationalEconomy of Estonia (EMTAK) basedon the Statistical Classification of EconomicActivities in the European Community(NACE); the codes for the representation ofnames of countries and their subdivisions(ISO 3166) and codes for the representation

of currencies and funds (ISO 4217) whenpreparing statistical reports.



The boundaries of the economic territory ofEstonia coincide with the geographicboundaries of the Republic of Estonia.

For the purpose of compiling money and bankingstatistics, the definition of residence is the sameas the one used for b.o.p. statistics, and followsthe IMF’s definition (Balance of PaymentsManual, 5th edition). When defining thedomestic territory for money and bankingstatistics, branches (and subsidiaries) of Estonianbanks abroad are regarded as non-residents,whereas branches of foreign banks located inEstonia are regarded as resident banks.


2.2.2.1 Definition and classification of sectorsin monetary statistics

See Table 2.


See Table 3.



The Credit Institutions Act concerning thestatus and supervision of credit institutionsdefines the legal provisions governing bankingactivity. It incorporates into Estonian legislation


Estonia

the EC Directive of 15 December 1989 on theco-ordination of laws, regulations andadministrative provisions relating to the taking-up and pursuit of the business of creditinstitutions (89/646/EEC) and the EC Directiveof 6 April 1992 on the supervision of creditinstitutions on a consolidated basis (92/30/EEC).

The term “credit institutions” covers allEstonian credit institutions as well as theirbranches and subsidiaries abroad and foreigncredit institutions which have branches orsubsidiaries in Estonia. A credit institution isa private legal entity, the main activity ofwhich is receiving deposits or other repayable

Sector Sectors Definitionsclassification

Table 2

Money-creatingsector

Bank of Estonia Central bank

Credit institutions Legal entities in their own right according to the Law on CreditInstitutions, Article 3.

Savings and loan associations Financial institutions whose principal and permanent activity is to conducttransactions and operations, such as receiving deposits and granting loansas well as various other banking activities, in order to serve their membersonly, i.e. natural persons who reside or own immovable property withinthe territory of the SLA, and the legal persons located within the sameterritory.

Money-holdingsector

Financialcorporations

Financialcorporations, except

insurancecompanies andpension funds

Legal entities in their own right which are engaged in supplying financialservices with the aim of making profit according to the Law on CreditInstitutions, Article 4, with the exception of insurance companies andpension funds. This covers various loan and savings undertakings,investment funds, the stock exchange, brokers’ offices, etc.

Insurancecompanies andpension funds

Insurance companies are institutions whose main classes of insurance arenon-life insurance, life insurance and reinsurance (i.e. activities as aninsurance agent or insurance broker). Pension funds are voluntary andcompulsory mutual funds, the principal objective of which is to provideunit-holders of the pension funds with a funded pension under theconditions and pursuant to the procedures provided for in the FundedPensions Act.

Other residentnon-financial

sector

Commercialundertakings ofState and local

government

Legal entities in their own right which are engaged in supplying or sellingnon-financial services and goods with the aim of making profit and whichcome under the control of central or local government. This type of controlover legal persons can be achieved through direct involvement (where100% of shares or the major judgement right belong to the State or localgovernment) or indirectly (through legislation that grants the State or localgovernment the right to establish the active policy of the commercialundertakings or appoint its management). State and municipalundertakings which have not yet been transformed also belong to thiscategory.

Other commercialundertakings

The remaining legal entities in their own right that are engaged insupplying or selling non-financial services and goods with the aim ofmaking profit (corporations, partnerships, profit associations) and whichare not covered by the above institutional sectors. Entrepreneurs as naturalpersons employing one or more employees also belong to this category.

Individuals Natural persons and entrepreneurs as natural persons, not functioning asemployers with employees. If it is not possible to establish the non-existence of hired labour, the entrepreneurs as natural persons will bedeclared under other commercial associations.

Non-profitassociations

Voluntary unions of persons and legal entities in their own right whichmay supply goods and services free of charge or for payment, but may notbe making a profit through economic activities as their main occupation.Various member-based organisations in the form of unions, movements,associations, foundations, clubs and societies belong in this category.


Estonia

funds from the public and granting credit ontheir own name and account, or any otherform of financing activity. A universal bankingprinciple has been adopted in Estonia, whichmeans that all banks are entitled to conductall banking activities allowed by the CreditInstitutions Act. This law applies to all creditinstitutions.

The money-creating sector consists of theBank of Estonia, credit institutions and savingsand loan associations. The Bank of Estonia isthe only issuer of banknotes and coins.Monetary statistics relate to the assets andliabilities held by the credit institutionsoperating in Estonia (including the branchesand subsidiaries of non-resident creditinstitutions). Branches and subsidiaries ofEstonian credit institutions operating abroadare not included. None of the creditinstitutions has a European passport or ageneral or specific licence.


There are two categories of other monetaryinstitutions in Estonia: savings and loanassociations (SLAs) and money market funds(MMFs).

SLAs are co-operative-type financial institutionswhose activities are regulated by the SLAAct (effective from 1 July 1999,http://www.legaltext.ee/). SLAs can only receivedeposits from their members, not from thepublic. They may also only grant loans tomembers, and their activities are restricted to acertain territory. Although there are currently11 SLAs, only two of them voluntarily submitbalance sheet data on a monthly basis. Thesetwo are included in the calculation of Estonianmonetary aggregates.

The legal definition of a money market fundhas not been implemented into thelegislation of Estonia. For statisticalpurposes, i.e. when compiling the list of


Table 2 (continued)

Comprises persons who do not reside permanently in Estonia or ownlimited residence permits for at least one year; persons who have leftEstonia for a foreign country and have stayed there for at least one year;legal entities which have been registered and are residing in a foreigncountry (including participation in Estonian undertakings, among themEstonian affiliated undertakings in foreign countries); foreign diplomatic,consular and other official representatives granted immunity anddiplomatic privileges; and representatives of foreign institutions in Estonianot engaged in financial and commercial activities.

Generalgovernment

Central government Entities responsible for the government of the State and its defence, theadministration of central government, as well as institutions of science,research, health, welfare, education, culture and sport, financed by thegovernment budget. This category also covers the embassies andconsulates of foreign countries.

Local government Entities of local government and science, research, health, welfare,educational, cultural and sport institutions financed out of localgovernment budgets.

Social securityfunds

(from January2001)

The public health and unemployment insurance system.

Non-budgetaryfunds

Various non-budgetary foundations and funds established by central andlocal government.

Non-residentsector

Rest of the world1) (non-residents)

1) The non-resident sector is broken down in the same manner as the resident sector.

Money-holdingsector


Estonia

S22


Table 3




Bank of Estonia S121

Central bank


Credit institutions S122


S12


Money-holdingsector

S123


and pension funds

Money-holdingsector

S124


S125


S11


S14

Households

S15


Generalgovernment


Central government

S13

General government

Money-neutralsector

Non-budgetary funds S1312

State government

Money-holdingsector

S1313

Local government

Rest of the world 2) (non-residents)

S1314


Non-residentsector

S211

EUcountries

S21

The EU

S2

Rest of the world

Non-residentsector

S212


Savings and loan associations


Financialcorporations, exceptinsurance companies

and pension funds

Insurance companiesand pension funds

Other residentnon-financialcorporations

Commercialundertakings of the State

and local government

Other commercialundertakings

Individuals

Non-profitassociations


Local government

n.a.

2) The non-resident sector is broken down in the same manner as the resident sector. Data on the rest of the world can be broken down country-by-country.


Estonia

monetary financial institutions (MFIs), theBank of Estonia analyses all the mutualfunds in order to select the ones thatcorrespond to the ECB’s definition of amoney market fund. Data on MMFs arenot yet included in the calculation ofmonetary aggregates.


Not applicable.

made between demand deposits, timedeposits, saving deposits and other types ofdeposits.

Owing to their transferable nature, demanddeposits are collected from customersoffering a rather low interest rate. Thecomputation base of the interest rate mayalso vary between credit institutions, i.e. theminimum or the average outstanding amountover a predetermined period.

Time deposits cannot be converted intocurrency before an agreed term withoutincurring a penalty. Savings deposits also havean agreed maturity, but in this case it ispossible to add money to the deposit account.There are several kinds of deposits on themarket offering features which are typical ofboth transaction and savings accounts.

Credit institutions offer their customers awide range of lending services: mortgageloans, consumer credits, current accountadvances and credit lines. Loans can havefixed or floating interest rates.

Demand deposits – are intended for settlement with a third party– are unlimited by time– are transferable and can be freely used and disposed of (in exceptional cases, 24 hours’ notice

may be required)– offer the possibility of a negative credit balance, i.e. an overdraft– permit additional payments to be made at any time

Time deposits – are intended for the deposit of money– are not intended for settlements with a third party– are subject to terms fixed by a contract– have the rate for the deposited amount fixed by a contract, which cannot be changed– must abide by the terms of the contract, or sanctions in the form of fines will be imposed

Savings deposits – are intended for the collection and deposit of money– are not intended for settlement with a third party– allow the deposit date to be related to some special occasion (e.g. wedding day), by which

time a fixed amount of money will have been deposited in the account– require the deposit of a minimum amount of money which is established by the credit

institution– allow the deposited amount to be increased– must abide by the terms of contract, or sanctions in the form of fines will be imposed– may require advance notice in the case of withdrawals


The main items on the liabilities side ofuniversal banks are deposits. A distinction is



Credit institutions 7Credit institutions 7

Other monetary financial institutions 18Savings and loan associations 11Money market funds 6

Total 25



Estonia



The following applies mainly to creditinstitutions. The description of the mainbalance sheet items also applies to SLAs.

Liabilities (main items):• amounts owed to the central bank;

• amounts owed to credit institutions;

• amounts owed to customers;

• government lending funds and counterpartfunds (resources allocated by theGovernment to credit institutions fortransaction loans, and resources inEstonian kroon received from the sale ofgoods sent to Estonia within theframework of various foreign aidprogrammes);

• debt securities issued;

• subordinated liabilities and other liabilities(items in transit, the negative position offuture transactions, call premiums, etc.);and

• capital and reserves.

Assets (main items):• cash;

• claims on the central bank;

• claims on credit institutions;

• claims on customers;

• allowance for uncollectable claims;

• securities;

• intangible assets;

• tangible assets;

• other assets (payments in transit, tangibleand intangible assets for sale, preciousmetals, dividend receivables, etc.); and

• accrued income and prepaid expenses.


Most of the breakdowns of credit institutions’balance sheet items are derived fromadditional statements.

In most of the financial statementssubmitted by credit institutions, thebreakdown of assets and liabilities by termis based on the original maturity. The shortterm covers operations with a term of upto one year. In the case of loans, thematurity is established on the basis of theterm of the loan as stated in the loanagreement (which also states whether theloan is issued in parts). In the case ofsecurities, the maturity is establishedaccording to the redemption date of thesecurity. Where securities are bought withthe obligation to resell, the maturity isshown according to the period for whichthe security is held. In the case ofsecurities held in a trading portfolio, thematurity is “on demand”.

For the purpose of prudential control, creditinstitutions also supply a monthly outline oftheir operations by the main items underassets and liabilities, broken down accordingto their residual term.

All the information flows include details ofthe domicile of counterparties, separating thedata for residents from those for non-residents. Non-residents are broken downcountry-by-country, and all the necessarydetails of operations with European Unioncountries or with third countries areprovided. Since January 2001, the definitionof monetary financial institutions (MFIs) hasbeen fully implemented and the list of MFIs(including credit institutions, money market


Estonia

funds and SLAs) has been defined, with abreakdown for MFIs introduced into thereporting system. Monthly details on deposits,loans, non-performing loans/loan lossprovisions and securities are available for eachcurrency. Balance sheet statistics on amonthly basis (and also every ten days)provide information on two groups: domesticand foreign currency. Foreign currencyoperations are converted into EEK at theexchange rate of the reference date of thereturns. Further details (breakdown bycurrency) are available in additional monthlyfinancial reports.

In their monthly financial statements of loans(both turnover and stock), non-performingloans/loan provisions and securities, creditinstitutions supply a breakdown by industrysector according to the Classification of theNational Economy of Estonia (EMTAK), basedon the Statistical Classification of EconomicActivities in the European Union (NACE)

rev.1, A17. Data are crosschecked againstbalance sheet totals.

The available breakdowns correspond tothe breakdowns determined in RegulationECB/2001/13 concerning the consolidatedbalance sheet of the monetary financialinstitutions sector.



Estonia operates a currency board-basedsystem, and the Bank of Estonia does not usetargets in the form of monetary aggregatesto implement monetary policy. Nevertheless,it calculates and publishes information onthree monetary aggregates: M0, M1 and M2.Measures of money take into account the

Instrument Maturity Counterpart

Resources:– Overnight deposits– Time deposits– Savings deposits– Repo agreements– Other deposits– Received loans– Money market instruments– Other debt securities issued– Resources of lending funds and

counterpart fundsLoans– Transaction loans with interest rate

restriction– Other loans with interest rate

restriction– Overdrafts– Subordinated claims– Other loans– Repo agreements– Other claimsSecurities– Money market instruments– Other fixed income securities– Shares in associated undertakings– Shares in affiliated undertakings– Other shares– Shares– Privatisation vouchers

Residency

Country-by-country breakdownavailable according to ISO 3166.

– Without maturity– On demand– One to five banking days– Five to ten banking days– Ten banking days to one month– One to two months– Two to three months– Up to three months– Three to six months– Six to 12 months– One to two years– Two to three years– Three to five years– Five to ten years– Over ten years

Currency

Currency-by-currency breakdownavailable according to ISO 4217.

– Central government– Local government– State social security fund– Other non-budgetary funds– Insurance company and pension

funds– Other financial institutions– Of which MFI– Credit institutions– Commercial undertaking of the State

and local government– Other commercial undertakings– Non-profit associations– Individuals


Estonia

relevant liabilities of all credit institutionsoperating in Estonia and licensed by the Bankof Estonia, irrespective of whether they areEstonian-owned or subsidiaries/branches offoreign banks.

Box 1

Measure M0 includes:

– currency in circulation (EEK banknotes and coins), including those held in the tills of credit institutions;

– residents’ demand deposits at the Bank of Estonia

– EEK accounts of non-residents at the Bank of Estonia.


– currency in circulation (excluding the cash held in credit institutions and in the tills of two SLAs); and

– residents’ EEK- and foreign currency-denominated demand deposits, excluding central government; central

government counterpart funds and MFIs, at banks and two SLAs (including government and non-residents’

deposits).


– M1;

EEK- and foreign currency-denominated time, savings and other deposits, excluding deposits of central

government, central government counterpart funds and MFIs in credit institutions, Bank of Estonia and

SLAs.


The only freely transferable negotiableinstrument in the monetary base is cash.

Box 2Net external assets

Net external assets comprise the banking sector’s1 claims on non-residents net of foreign liabilities, i.e.

liabilities of the banking sector held by non-residents.

Domestic credit

Domestic credit consists of the financial claims of the banking sector on residents. Intra-sectoral claims and

liabilities among banking sector institutions are excluded here. Domestic claims are divided into five sub-

sectors: central government, local government, financial institutions other than banks, non-financial public

enterprises and the private non-financial sector. Central government, which includes budgetary institutions

and governmental non-budgetary funds, is treated on a net basis. Three main types of financial claims are

included under domestic credit: loans, debt securities and shares held for trade.

Other items net

Other items net comprise the net sum of all non-financial assets and unclassified liabilities which do not come

under the heading of broad money. All intra-sectoral claims and liabilities within the banking sector are also

netted here.

3 The banking sector consists of the Bank of Estonia, all credit institutions as defined in the Credit Institutions Act, and two SLAs.

Banknotes and coins held by foreigners areconsidered to be held by residents and areincluded in the monetary base.


For more details on the classification of creditto domestic residents see Box 2.


Estonia

2.8 Reserve money

The monetary base (M0) comprises: currencyin circulation (EEK banknotes and coins,including those held by credit institutions);residents’ demand deposits at the Bankof Estonia and the EEK accounts of non-residents at the Bank of Estonia.



The Credit Institutions Act states that, inorder to perform duties arising from the Bankof Estonia Act (1994), the Bank of Estoniahas the right to demand that creditinstitutions submit reports on a regular basis.However, in order to minimise the burdenon reporting agents, the data from creditinstitutions as well as from mutual funds,investment firms, insurance and pension fundsand fund managers are actually collected bythe FSA and afterwards shared with the Bankof Estonia using a common database. TheFSA’s legal power to obtain data from creditinstitutions is determined by the CreditInstitutions Act and Bank of Estonia Decrees(the full texts of the main Bank of EstoniaDecrees concerning the reporting of creditinstitutions can be found on the Bank ofEstonia’s website, at http://www.ee/epbe/norm/index_green.html.en.). According to theFinancial Supervision Authority Act (Article48 (2)) and Law on the Central Bank ofEstonia (Article 2 (5)), the FSA is required toprovide the Bank of Estonia with information

necessary for the performance of itsfunctions.



A wide variety of different data is collectedfrom the credit institutions on a monthlybasis, including a full balance sheet andadditional detailed reports on loans, deposits,securities and non-performing loans (forfurther details, see Section 2.1.1). Data mustbe sent by the fifth banking day after the endof the reporting month. The data arecollected electronically from the creditinstitutions.

Two reporting SLAs provide balance sheetdata on a monthly basis by the tenth bankingday of the following month. The data are senton hard copy.


The Central Accounting Departmentprepares the balance sheet data of the Bankof Estonia each month. The aggregatedbalance sheet data of the Bank of Estonia areavailable to the public on a monthly basis onthe fifth day of the following month. Data aregathered using a database. The CentralAccounting Department prepares the balancesheet data of the Bank of Estonia each month.The published balance sheet of the Bank of

By sector By type By maturity

– Central government – Loans See table in Section 2.5.2.– Local government – Debt securities– Social security funds– Non-budgetary funds– Insurance corporations and pension funds– Other financial corporations– Credit institutions– Commercial undertakings of state and local government– Other commercial undertakings– Non-profit associations– Individuals


Estonia

Estonia has been structured so that thedomestic and foreign assets and liabilities canbe separated. In addition, the balance sheetstructure demonstrates how the Estoniankroon is backed by gold and convertibleforeign currency assets. In general, the Bankof Estonia’s accounting procedures are in linewith the principles described in theAccounting Act of Estonia (effective from1 January 1995, latest version effective from1 January 2003), although minor deviationsarising from central bank-specific activitiesmay appear. Starting from 31 December 2005,the Bank of Estonia will use accountingprinciples and a presentation of informationformat in accordance with the ECB’saccounting guidelines. If there are cases whichare not regulated by these guidelines, goodaccounting practice or the IAS will befollowed (Accounting Act Article 17 (1)). Thebalance sheet is prepared in accordance withthe historical cost basis of accounting,modified to include the revaluation of certainassets and liabilities. Hence, all assets andliabilities are recorded at fair values.

The Accounting Act of Estonia is applied tothe Bank of Estonia’s accounting procedures.The Accounting Act generally takes intoaccount the IAS.

Foreign currency assets and liabilities aretranslated into EEK at the official Bank ofEstonia exchange rate valid on the balancesheet date. Gold reserves are valued at themarket rate at the end of each month.

Foreign Treasury bills and other quotedsecurities denominated in convertiblecurrencies are recorded at their market value.Securities purchased under repurchaseagreements are recorded as issued loans thatare guaranteed with securities. Securitiespurchased under reverse repurchaseagreements are recorded as received loansguaranteed with securities.

Investments in shares are accounted for attheir purchase price, less provisions for anydiminution in value other than temporary.

Derivative instruments comprise foreigncurrency futures and swaps and are recordedoff-balance sheet at their realisation cost.Loans and other assets are reassessedperiodically and specific provisions areestablished against those considered to bebad or doubtful owing to the borrowers’insolvency. Loan and other asset provisionsare recorded as expenses in the reportingperiod and are included in the balance sheetas a deduction against the assets concerned.Loans and other assets remain in the balancesheet until they have been repaid or writtenoff. They are written off only after all legalmeasures to recover them have been taken.

Fixed assets with an acquisition cost of over5,000 kroons are recorded at cost, lessdepreciation which is calculated on a straight-line basis over the estimated useful lifetimeof the assets according to predeterminedrates.


Number % (of the total % (of the totalof reporting category) balance sheet of


Bank of Estonia 1 100 17.1

Credit institutions 7 100 78.9Credit institutions 7 100 78.9

Other monetary institutions 2 15.4 4.1Savings and loan associations 2 18 0.1Money market funds 0 0 4

Total 10 - 100



Estonia

All known liabilities and provisions arereflected in the balance sheet, if their volumecan be estimated with reliability and they arelikely to be realised. Potential liabilities,sureties and guarantees are accounted for asoff-balance sheet items.



The stock figures are end-of-period figures.

2.10.2 Revisions

The data are preliminary when first releasedand are subject to revision during thefollowing month. The final data are publishedthe following month with the next issue ofmonetary statistics.

The Bank of Estonia gathers data for monthlyflows on deposits and loans. The datagathered are “credit flow” data, i.e. do notyet comprise any adjustments made forbreaks in series. The compilation of data onadjustments will be implemented during 2003.Any changes in the reporting population arealways stated when the data are released.

During 2003 a new data collection systemfor flow statistics will be implemented.Data on non-financial transactions (onreclassifications, other adjustments, exchangerate changes and price revaluation changes)will be collected directly from reportingagents. All the breakdowns needed to compileECB flow statistics should be available.


Not applicable.

2.11 Publications

2.11.1 First release of data (includingmedium)

The Bank of Estonia publishes a wide range ofdata on its website (http://www.ee/epbe/) eachmonth. The exact schedule of the release ofdifferent indicators relating to the Estoniancommercial banking sector is as follows:


The core monthly publication is the printedsummary of the Estonian monetary statisticsin the “Selected Statistics” bulletin (available

Data Release date (bankingday from beginning

of month)

Balance sheets 11Loans granted to customers 17Securities 16Deposit stocks and deposits attracted during a one month period 18Claims on credit institutions and liabilities to credit institutions 18Interest rates 17Profit/loss 18Prudential ratios of credit institutions 13Open foreign exchange position 12Off-balance sheet items 18Foreign currency purchased/sold in credit institutions during a one month period 14Money supply 19Banknotes and coins in circulation 12Payment intermediation 18Electronic payments settled through the Bank of Estonia’s Clearing Department 6Banking sector in short4 18

4) Consists of a short overview of consolidated balance sheets of banks, selected indicators and ratios.


Estonia

in Estonian and English). It contains the sameinformation as found on the Bank of Estoniawebsite, but in a more concise format. Thebulletin is only available on paper. The dateof release is the eighth calendar day followingthe end of the reference month.

In October 1998 Estonia completed theadoption of the SDDS. Estonian meta-pagesdescribing the nature of the data, the qualityand methodology of its compilation andaccess by the public have been available onthe IMF’s electronic Bulletin since January1999 (http://dsbb.imf.org). The pagecontaining country data can be found via theSOE’s website at http://www.stat.ee or byusing the direct link from the IMF’s website.


Statistical data are also included and used inthe following publications of the Bank ofEstonia:

• The Annual Report of the Bank of Estonia,published in Estonian approximately fivemonths after the end of the year and inEnglish approximately six months after theend of the year.

• The Monetary Developments and PolicySurvey (quarterly, published in Estonianand English), available on hard copy and onthe Bank of Estonia’s website.

3 Contacts at the Bank of Estonia


Financial Stability Department, FinancialSector Statistics DivisionBank of EstoniaEstonia pst 13, 15095Tallinn, EstoniaPhone: (+372) 6 680642;Fax: (+372) 6 680943E-mail: [email protected]


Estonia

Annex 1

Organisation chart of the Bank of Estonia


Estonia

Organisation chart of the Statistics Department and Financial Stability Department of the Bank ofEstonia

Balance of

Payments Statistics

Division

Statistics

Department

Economic

Statistics Division

Financial Stability

Department

Financial Sector

Statistics Division

Financial Sector

Policy Division

Annex 2

Hungary


Hungary


ACI Act CXII of 1996 on Credit Institutions and Financial Enterprises

ÁKK Rt Government Debt Management Agency

AMNB Act LVIII of 2001 on the National Bank of Hungary

ÁPV Rt State Privatisation and Holding Company

AST Act of 1993 on Statistics

CPI Consumer Price Index

CSO Central Statistical Office


EMU Economic and Monetary Union


EU European Union

FDI Foreign Direct Investment

HFSA Hungarian Financial Supervisory Authority

HUF Hungarian forint

MÁK Rt Hungarian State Treasury

NA Rt National Motorways Ltd.

NBH National Bank of Hungary

NSS National Statistical Service

OSAP National Statistical Data Collection Programme


SNA 1993 System of Nation Accounts 1993


Hungary



1.1.1 Organisation chart of the NationalBank of Hungary (NBH)

See Annex 1.


See Annex 2.

Act LVIII of 2001 on the National Bank ofHungary (AMNB) defines the collection andpublication of statistical information as oneof the NBH’s core duties. The NBH operatesa central bank information system to whichfinancial institutions and legal entities that donot qualify as financial institutions but provideauxiliary financial services, plus investmentservices providers as well as clearing housesare obliged to contribute information asspecified by the NBH. The NBH publishes allimportant information relevant to theoperation of Hungarian credit institutions andthe country’s financial position. The NBHprovides international institutions, includingthe statistical office of the European Union(Eurostat) and the European Central Bank(ECB), with data on a regular basis.

The Statistics Department’s task is to performthe Bank’s statistical service activity and, inthe framework of this activity, to develop,operate, maintain and upgrade the Bank’sstatistical information system. TheDepartment has four divisions: balance ofpayments, monetary statistics, financialaccounts, and data processing divisions. Thedata processing division produces and handsover basic data complemented with auditreports to the monetary statistics division.The monetary statistics division checks thecontent of the data; plans new datacollections; checks, organises and analyses

factual aspects of monetary data; developsand maintains the methodology; and preparesand publishes monetary statistical data andregular press releases. It also provides datafor monetary policy decision-making, foranalyses and the preparation of forecasts; andparticipates in data-providing activities forinternal and external purposes. The dataprocessing division receives and processesdata supplied by data providers, ensurescompleteness and reliability of basic data, andmaintains the regulations for data providers.It also recommends to the SupervisionDepartment the areas to be checked in off-site examinations, evaluates the findingsrecorded in the minutes of examinations,defines the actions to be taken, and preparesthe year by year evaluation of data providers.The data processing division operates andmaintains the information system that ensuresthe compilation of statistical data.Furthermore, it regularly prepares statisticaltables, charts and time series required by theother divisions of the statistical department.


The AMNB, which defines the framework ofthe Bank’s operations, can be found on theNBH’s website (www.mnb.hu) under “Aboutthe Bank”. The AMNB also defines the rangeof institutions providing financial services thatthe NBH may oblige to report data. In orderto be able to perform its tasks, it is necessaryfor the NBH to collect data from a widerrange of institutions than the above. Data ofthis type are collected within the frameworkof the National Statistical Data CollectionProgramme (OSAP), on the legal basis ofAct XLVI 1993 on Statistics.

Government Decree No. 221 of 2000provides for the specific features of the NBHobligations related to bookkeeping and thepreparation of its annual accounts.


Hungary




The NBH is the central bank of the Republicof Hungary. In performing its tasks defined bylaw, the NBH as a whole, as well as membersof its decision-making bodies, is independentand may not seek or accept instructions fromthe Government or any other body. TheNBH is headed by a President, who isappointed for a term of six years by thePresident of the Republic of Hungary on therecommendation of the Prime Minister. TheBank’s President has the obligation to reportto Parliament. The NBH’s primary objectiveis to deliver and maintain price stability.Without prejudice to its primary objective,the NBH supports the Government’seconomic policy using the monetary policyinstruments at its disposal. The NBH is alegal entity operating as a company limited byshares. The shares of the NBH are owned bythe State of Hungary. The State, as the Bank’sshareholder, is represented by the Ministerof Finance. In respect of its core duties, thesupreme decision-making body of the NBH isthe Monetary Council.

1.3.1.2 General responsibilities of the central bank

In Hungary, the Constitution defines the coreduties of the central bank at the highest level.This states that the tasks of the NBH are toissue legal tender, to protect the value of thenational currency and to regulate paymentturnover. The Constitution delegates thedetailed definition of tasks to the competenceof a separate law (AMNB LVIII of 2001), whichdetails the basic duties of the NBH as follows:

• to define and implement monetary policyin the interests of maintaining the stabilityof the national currency;

• to issue banknotes and coins, which isthe exclusive right of the NBH. These

constitute the legal tender of the Republicof Hungary;

• to set up and manage official reserves inforeign exchange and gold;

• to conduct foreign exchange operations inrelation to the management of foreignexchange reserves and the implementationof exchange rate policy;

• to develop and regulate domestic paymentand settlement systems, and support theefficient and sound operation of thesesystems;

• to collect the necessary statisticalinformation in order to undertake its tasksand to publish this information;

• to promote the stability of the financialsystem and the development and smoothconduct of policies related to theprudential supervision of the financialsystem.

Without prejudice to the achievement of itsprimary objective and performance of its basictasks, the NBH may perform other activities,based on statutory authorisation.

The NBH manages the current account ofthe Hungarian Treasury as well as othergovernment accounts as specified by theMinister of Finance. The NBH may not extendloans to the State, to local government, toother government institutions, or toeconomic organisations operating under thedominant influence of the State or localgovernment. Furthermore, the NBH may notpurchase securities issued by such institutionsdirectly from the issuer. The NBH managesthe current accounts of credit institutions,unless it authorises another credit institutionto do so, as well as the current accounts ofthe National Deposit Insurance Fund and theInvestor Protection Fund. Those bodies thatthe NBH maintains current accounts for mayplace deposits with the NBH.


Hungary



The NBH collects and processes data relatedto monetary statistics, balance of paymentsstatistics and financial accounts. Based onthese, statistical press releases are issued witha monthly frequency on the Bank’s balancesheet, the consolidated balance sheet ofmonetary institutions and the monetaryaggregates, the balance of payments anddevelopments in households’ financial savingsas well as on borrowing and lending rates tonon-financial corporations, the householdsector and on interbank forint lending rates.In addition to these, a quarterly statisticalpress release is issued on the distribution ofsecurities holdings, supplemented, as of 2003,by one on financial accounts. The dates ofrelease are fixed in a calendar of releases sixmonths in advance on the Bank’s website.The press releases and all the public timeseries of monetary and balance of paymentsstatistics, household savings and securitiesholdings, CPI and core inflation as well asexchange rate data have been published onthe Bank’s official website since the summerof 2000. In May 2002, the Bank ceased topublish a Monthly Report; however, all thestatistical tables of the Report are maintainedand made accessible as downloadable files onthe Bank’s website.


In Hungary, all official statistical data areprepared by the National Statistical Service(NSS), of which the NBH is also a member.In the National Statistical Service it is theCentral Statistical Office (CSO)’s task to co-ordinate statistical activities. Therefore, inaddition to international institutions, theNBH closely co-operates with a number ofnational institutions, of which the CSO, theMinistry of Finance and the HungarianFinancial Supervisory Authority are the mostimportant. In addition to collecting data fromcredit institutions, as specified by the AMNB,the Bank additionally has the right to specifycompulsory data reporting within theNational Statistical Data CollectionProgramme (OSAP). The legal basis of OSAPis laid down in the Act on Statistics XLVI of1993 and in Government Decree 170 of 1993regarding the execution of this act.

The NBH co-operates with the CSO incompiling financial accounts within theframework of national accounts. The NBHand the Hungarian Financial SupervisoryAuthority (HFSA) share data from financialinstitutions, investment services providersand clearing houses. The contents of theregular data collections are harmonised inadvance. Since the beginning of 1998, acommon credit institution balance sheetreport has been used by the two institutions.

1.3.2.3 Overview of statistical data collection andcompilation methods

See Table 1.

Table 1 only includes statistics compiled bythe NBH.


Hungary

Statistical Money and banking statisticsareas

Bank balance sheet statistics/ Interest rate statistics Securities statisticsmonetary aggregates and counterparts

Table 1

Collecteddata

Statistics on securitiesholdings collectedby the NBH do notcover all data,including serially-issued securities only.

Data cover the accounts of the NBH andcredit institutions (commercial banks,savings co-operatives and specialisedfinancial institutions).

The data collected are end-of-month data.The balance sheet of money market fundscontains end-of-year data only.

Reporting deadline:

• The NBH’s balance sheet (preliminary):5th day after the end of the reference;

• The NBH’s balance sheet (final): 25th dayafter the end of the reference month (from2003, 11th working day after the referencemonth);

• statutory balance sheet of creditinstitutions: 13th working day after theend of the reference month, (from 2003,11th working day after the referencemonth);

• (statistical balance sheet of money marketfunds: from 2003, 13th working day afterthe end of the year)

Central bank interest rates (base rate, overnight collateralisedloan, interest rates on overnight deposits and two-weekdeposits, interest rate on credits financing the state budget,interest rate on preferential refinancing credits, interest rateon the current account of the Treasury, interest rate onmandatory reserves of financial institutions and the ceilingof the central bank penalty rate);

• auction yields on Treasury bills and government bonds;

• interbank money market interest rates;

• market interest rates on non-financial corporations’ depositsand credits; and

• interest rates on household deposits and credits.

Periodicity is daily for central bank interest rates, interbankmoney market interest rates, and the benchmark yields ongovernment securities; monthly for the other interest rates.

Reporting deadline:

• day after the reference day for money market rates

• 9th day after the reference month (from 2003 the 10th

working day) for data on non-financial corporations

• 10th day after reference months for household data.

Data on securitiesdeposited withinvestment serviceproviders and thosedeposited with theNBH.

Reporting deadline:

• data must bereported quarterly,until the 10th

working day of themonth following thereference quarter.

Collectingagents

NBH, HFSA NBH NBH

Users NBH, HFSA, CSO, ECB, IMF, OECD,Eurostat, BIS, the general public

NBH, IMF, OECD, Eurostat, ECB, BIS, the general public NBH, the generalpublic

Description The source of central bank data is thebalance sheet statement prepared by theNBH’s Department of ManagementAccounting and Financial Reporting.

Credit institutions submit the statutorybalance sheet reports to both the NBH andthe HFSA.

Borrowing and deposit rates of non-financial enterprises andhouseholds: the average of annual interest rates, indicated incontracts concluded in the reference month, weighted bytotal contract value; and the weighted average of currentinterest rates in the case of end-of-month stocks.

Interest rate statistics on interbank money market interestrates include data on interbank money market transactions inforint, conducted under market conditions between domesticbanks and specialised credit institutions on the referenceday.

Auction yields are calculated as the arithmetic average ofyields, weighted by the amount of bids accepted.

The calculation of benchmark yields is regulated by theÁKK in its procedural rules. The benchmark yields ofgovernment securities are calculated for the Hungariansecurities market on each business day for each referencematurity. The reference maturities within one year are 3, 6and 12 months and 3, 5, 10 and 15 years over one year.


Hungary

Balance of payments statistics are compiledconsistent with the recommendations of theIMF’s Balance of Payments Manual (BPM5).

As from 2003, goods trade will be recorded onan accrual basis; the source of data on goodstrade will be customs statistics instead of thosebased on bank transactions.

Table 1 (continued)

Statistical Required reserves Financial accounts Balance of payments Prudentialareas supervision

Collecteddata

Data are collected for eachday: some of these arecollected day-by-day, andothers at a monthlyfrequency.

The base period lasts from thefirst day to the last day of amonth.

The reserve base is calculatedas the average of daily data.

Reporting deadline:

• 2nd working day after thereference period for bothdaily and monthly reporteddata.

Financial accounts statisticsbasically use data derivedfrom monetary statistics,balance of paymentsstatistics, government financestatistics and householdfinance statistics.

Financial accounts arecompiled quarterly (as from2003).

The primary compilation source of balance ofpayments statistics is the monthly report by thebanking system (credit institutions, NBH).

Reporting deadline:

• 8th working day after the reference month.

In addition, a separate report is provided on amonthly basis by exchange offices and byenterprises directly borrowing/extending loansfrom/to non-residents or holding accounts atnon-resident banks.

Reporting deadline:

• 20th calendar day after the reference month.

As a supplementary source, reports received bythe NBH from resident direct investors, FDIcompanies in Hungary and securities traders,the Central Clearing House and Depository Ltd.(KELER), as well as the Hungarian StateTreasury (MÁK) are also used for compilationpurposes.

See creditinstitutions’balance sheetstatistics.

Collectingagents

NBH NBH NBH, CSO

Users NBH (for the purpose ofcalculating required reservesand conducting monetarypolicy)

NBH, CSO NBH, ECB, IMF, OECD, Eurostat, BIS, WorldBank, UN, the general public

Description Daily and monthly reports ofcredit institutions and aspecial data report on otherreserve items provide a basisfor checking compliance withreserve requirements.

The NBH co-operates withthe CSO and the Ministry ofFinance in the compilation offinancial accounts.

As from Q1 2003, financialaccounts will be publishedwith quarterly frequency anda three-month delay.




Credit institutions and other corporationsthat provide auxiliary financial services (butqualify as credit institutions), as well asinvestment service providers and clearinghouses, are obliged by the AMNB to supplyinformation required by the NBH. The Bank’sdata requirements for monetary statistics arespecified in the “Guidelines for preparing theinformation to be provided by banks andspecialised credit institutions to NBH,

Volume 1” as well as the analogous guidelinesfor co-operative credit institutions. Thesedocuments are available on the Bank’swebsite (in Hungarian only).


One of the important preconditions forHungarian accession to the European Unionis the adoption of the statistical methodsrecommended by the EU and the ECB andthe fulfilment of the existing data andinformation reporting obligations. The sectorclassification introduced in 2001 conforms to


Hungary

those recommended by the ECB and theESA 95. From 2003, monetary statistics willsatisfy the criteria of the ECB related tomonetary statistics. In addition, the NBHendeavours to implement in its own principlesthe methodological principles of internationalinstitutions (such as the ESA 95, SNA 1993and the IMF’s Monetary and FinancialStatistics Manual).



Statistically, all natural persons, legal entitiesand unincorporated businesses that havedirect economic interest (permanentresidence, domicile, production etc.) withinthe local economy of Hungary are classified

as Hungarian residents. Hungary’s economicterritory does not include the enclaves ofother states or international organisationslocated within the territory of the country,even if geographically they are located withinits administrative borders (for example,government, diplomatic and militaryrepresentations, and government-levelcommercial and cultural representations ofother states). All economic units that do notsatisfy the criteria of resident status areclassified in the rest of the world sector. Thedefinition of residency is consistent with therecommendations of the IMF Balance ofPayments Manual (fifth edition) and of theSNA 1993. Branches of foreign banks inHungary are regarded as residents, whilebranches of domestic banks abroad areclassified as non-residents.

See Table 2.


Hungary

The non-resident sector is further broken down into EU Member States of Economic and Monetary Union(EMU) and other non-residents.

Table 2



Central bank NBH

Other monetaryfinancialinstitutions

This sub-sector consists of banks, specialised credit institutions and co-operative credit institutions (and,from 2003, money market funds), excluding the central bank.


Non-financialcorporations

The non-financial corporations sector includes corporations whose primary business is to produce goodsand non-financial services for the market. The following corporations are included in the sector accordingto the form of enterprise, excluding financial service providers:

– incorporated enterprises (societies, joint ventures, limited liability companies, joint stock companies),excluding ÁPV Rt, MÁK Rt, ÁKK Rt, NA Rt (see Central government)

– co-operatives (excluding co-operative credit institutions)

– other incorporated enterprises

– unincorporated enterprises (general partnership companies, limited partnership companies,condominiums, etc.)

– non-profit institutions serving, and financed by, non-financial corporations

Other financialintermediaries

This sub-sector encompasses financial intermediaries that do not accept deposits, but whose primarybusiness is to raise large amounts of other funds for the purpose of acquiring assets on the money andcapital markets. Included in this sub-sector are the majority of financial enterprises, excluding investmentfunds and money market funds, investment pools, venture capital firms and, within investment enterprises,pools that invest in securities, and dealers in securities.

Financialauxiliaries

This sub-sector consists of institutions whose primary business is to provide auxiliary financial serviceswhich are closely related to some kind of financial intermediation. However, the institutional unitscomprising this sub-sector do not collect significant amounts of funds; instead, they bring together lendersand borrowers in a way that does not materially affect their balance sheets. Also included in this sub-sectorare financial institutions whose primary business is to guarantee the safety of financial intermediation. Thesub-sector includes securities brokers as well as public exchanges, clearing houses, deposit insurancefunds, financial insurance corporations and other auxiliaries. Non-profit institutions whose activities areclosely related to the financial sector are also included.

Insurancecorporationsand pensionfunds

This sub-sector includes insurance companies, insurance associations, private pension funds, voluntarypension funds, health funds and mutual savings banks.

Localgovernment

Local government includes local government at the county and settlement levels and their institutions aswell as local government of ethnic minorities and their institutions. Also included in this sub-sector arenon-profit institutions that are financed and controlled primarily by local government.

Households The household sector comprises natural persons and sole proprietors. Sole proprietors include those withcertificates of licence and other sole traders (small-scale agricultural producers, craftsmen, private traders,etc.).


This sub-sector is comprised of the Pension Insurance Fund, the Health Insurance Fund and their institutions.

Non-profitinstitutionsservinghouseholds

Non-profit institutions serving households include non-profit institutions that raise funds from households,or those that are not controlled by the State or business. Such institutions may include trade unions, tradeassociations, political parties, churches, clerical institutions, societies and a significant number offoundations.

Money–neutralsector

Centralgovernment

Central government comprises the central government and its institutions, extra-budgetary funds, theGovernment Debt Management Agency (ÁKK Rt), the Hungarian State Treasury (MÁK Rt), the StatePrivatisation and Holding Company (ÁPV Rt) and the National Motorways Ltd. (NA Rt). Also included inthis sub-sector are non-profit institutions that are financed and controlled primarily by the centralgovernment.

Non-residentsector

Non-residents


2.2.2.1 Definition and classification of sectors in monetary statistics


Hungary

In 2001, the Statistics Department of theNBH introduced a new classification ofinstitutional sectors which is consistent withthe ESA 95 and conforms with the sectorclassification used by the ECB. This sectorclassification is identical to that currentlyapplied by the CSO. Until the end of 2002,there is no subdivision of the non-residentssector (S2).

Residents

– non-financial corporations;– central bank;– other monetary financial institutions;1


Table 3

National National sectors Sectors in ESA 95 ECBsector sector



NBH (S121) S121Central bank


S12Financialcorpor-ations

Other monetary financial institutions(S122)

S122 Other monetary financialinstitutions

Money-holdingsector

Other financialintermediaries

(S123)

Financial auxiliaries(S124)


(S125)

Other financialcorporations

(S123+S124+ S125)

S123Other financial intermediaries,

excluding insurers and pension funds

Money-holdingsector


S125Insurance corporations and

pension funds

Non-financial corporations (S11) S11Non-financial corporations

Households (S14) S14Households

Non-profit institutions servinghouseholds (S15)


Money-neutralsector

Money-neutralsector

Central government (S1311) S1311Central government S13

Generalgovern-

ment

Money-holdingsector

Money-holdingsector

(not applicable) S1312State/regional government

Local government (S1313) S1313 Local government

Social security funds (S1314) S1314 Social security funds

Non-residentsector

Non-residentsector

S211 EUCountries

S21European

Union

S2Non-resi-dents

S212 Institutionsof the EU

S22 Third countries andinternational organisations

S211 EUCountries

S21European

Union

S2Non-resi-dents

S212 Institutionsof the EU

S22 Third countries andinternational organisations

– other financial intermediaries;– financial auxiliaries;– insurance corporations and pension funds;– central government;– local government;– social security funds;– households;– non-profit institutions serving households.

Non-residents

1 As from early 2003, the other monetary financial institutionssub-sector also includes money market funds, in addition tocredit institutions.


Hungary



The provisions of Act CXII of 1996 on CreditInstitutions and Financial Enterprises (ACI)apply to activities related to the provision offinancial services, auxiliary financial servicesand bank representation as well as depositinsurance in the territory of the Republic ofHungary.

According to the ACI, only credit institutionsare allowed to:

– collect deposits and to accept otherrepayable monetary instruments from thepublic in excess of their equity capitalwithout a bank or state guarantee;

– provide financial transaction services,unless otherwise provided by the law;

– issue payment instruments substitutingcash and provide related services; and

– perform currency exchange activities.

Credit institutions may be banks, specialisedcredit institutions or co-operative creditinstitutions (savings or credit co-operatives).

Only banks are licensed to perform the fullrange of financial services listed in the ACI.Specialised credit institutions are permittedto perform activities pursuant to separatelegal regulations, with the limitation that theymay not provide all financial services listed inthe ACI. Co-operative credit institutions maynot perform the following service activities:safe custody for investment pools, creditreference services, or asset management forvoluntary mutual insurance funds. In addition,they are not allowed to perform the followingauxiliary financial service activities:participation in executing settlementtransactions or money processing activities.Credit co-operatives may only pursueactivities as defined by the ACI, except forcurrency exchange, and for their members’sole benefit.


In Hungary, MMFs have been identified andincluded in the provisional List of MFIs sinceJune 2002, but have been included in theother monetary financial institutions sub-sector since the beginning of 2003. Thenational definition of money market funds isidentical to the definition by the ECB.

2.3.3 Central government units withdeposit liabilities included innational measures of money

Currently, there is no such category.


In Hungary, banks generally provide all kindsof financial services to their clients. Theseencompass all activities enlisted in Article 3of the ACI: collecting deposits; extendingcredit and money loans; providing financialleasing and financial transaction services;issuing payment instruments substituting cash;undertaking surety and guarantees; pursuingcommercial activities with foreign currencies,foreign exchange, bills of exchange andcheques on a proprietary or commissionsbasis; intermediating financial services (agencyactivities); and providing safe custody services


Monetary institutions* Number ofinstitutions

Central bank 1


Banks 30

Specialised credit institutions 8

Co-operative credit institutions 189

Savings co-operatives 183

Credit co-operatives 6

Total 228

* As from 2003, the sub-sector will additionally include 16money market funds.


Hungary

for investment pools, depository business,safe deposit services, credit referenceservices, asset management services forvoluntary mutual insurance funds, cashtransfers, asset management, and investmentservices for private pension funds.

Banks are also involved in extending creditand accepting deposits, for example: varioustypes of credit, such as overdrafts, fixed andvariable rate loans, investment loans, currentaccount deposits of various types, savingsaccounts, time deposits, savings notes andcertificates of deposit.



The statistical balance sheet of the NBHpresents domestic and foreign assets basedon the gross accounting method. Theseinclude the following:

Assets:

– other claims on residents (presentedseparately in terms of other monetaryfinancial institutions and central government);

– claims on non-residents.

Liabilities:

– shareholders’ equity;– liabilities to residents;– liabilities to non-residents.

The monetary base (M0) is published as asupplement to balance sheet data.

Consolidated balance sheet of othermonetary financial institutions:

Assets:

– claims on non-financial corporations;– claims on the MNB;– claims on other monetary financial

institutions;– claims on other financial corporations;– claims on general government;

– claims on central government;– claims on local government;– claims on social security funds;

– claims on households;– claims on non-profit institutions serving

households;– claims on non-residents, and– remaining assets (accrued interest, own

assets, repurchased shares, other assets).

Liabilities:

– liabilities to non-financial corporations;– liabilities to the NBH;– liabilities to other monetary financial

institutions;– liabilities to other financial corporations;– liabilities to general government;

– liabilities to central government;– liabilities to local government;– liabilities to social security funds;

– liabilities to households;– liabilities to non-profit institutions serving

households;– liabilities to non-residents; and– remaining liabilities and capital elements

(forint bonds, subordinated liabilities,specific provisions, equity, accruedinterest, other liabilities).

2.5.2 Breakdown of the main balancesheet items by maturity,counterparty and currency

Breakdown by instruments:


Hungary

Assets:

– cash;– credits;– bonds (including all debt securities, such

as government securities);– shares and other equities;

– portfolio investments;– financial investments;

– repurchase agreements;– derivatives.

Liabilities:

– credits and deposits;– repurchase agreements;– bonds;– subordinated liabilities;– derivatives.

Breakdown by maturity:

– sight;– maturities up to one year;– maturities over one year.

Breakdown by denomination:

– forint;– foreign currency.

2.6 National measure(s) of money:definitions and remarks


Box 1

Until end-December 2002

Monetary aggregate M1 includes:

– banknotes and coins outside banks

– sight deposits and current accounts in HUF

Monetary aggregate M2 includes:– M1

– sight deposits and current accounts in

foreign exchange

– time deposits


– repurchase agreements

– debt securities issued by other monetary



– government paper held by residents other

than monetary institutions

– NBH bills held by residents other than

monetary institutions

From January 2003


– banknotes and coins outside monetary

institutions

– sight deposits and current accounts


– deposits for a maximum term of 3 months,

at prior notice of withdrawal

– time deposits (with maximum terms of

2 years)


– M2

– repurchase agreements

– debt securities issued by monetary

institutions (for maximum terms of 2 years)

– investment units issued by money market

funds

Monetary aggregate M4 includes:– Currency outside monetary financial

institutions

– total deposits and debt securities

issued by monetary financial institutions

– non-monetary government

securities outstanding


Hungary


An accurate sector breakdown of transferableinstruments such as banknotes and coins,certificates of deposit and marketablesecurities is not available.


The consolidated balance sheet of monetaryinstitutions is constructed by consolidatingthe NBH’s statistical balance sheet with theother monetary financial institutions’aggregate balance sheet. The assets sidecomprises claims on residents, claims on non-residents and net other assets.

2.8 Reserve money

Components of the monetary base (M0) areend-of-month stocks of total notes and coinsin circulation and the monthly average ofdeposits maintained by monetary institutionsin their central bank accounts. As from 2003,M0 will consist of the monthly average of

both total notes and coins in circulation andof other monetary financial institutions’current accounts and overnight deposits heldat the central bank.



The AMNB empowers the NBH to collectinformation from monetary financialinstitutions for statistical and other purposes.The legal basis for statistical data collectionfrom other institutions (e.g. other financialinstitutions, non-financial corporations) is theAct of 1993 on Statistics (AST). According tothe AST, members of the NSS, to which theNBH also belongs, are authorised to collectinformation for statistical purposes from anyinstitution or person. It constitutes groundsfor sanction when an on-site or off-siteinspection by the central bank finds that anorganisation specified in Act CXII of 1996 onCredit Institutions and Financial Enterprises,Act CXX of 2001 on Capital Markets andOSAP under Act XLVI of 1993 on Statistics,

Box 2Claims on residents

This entry comprises net credit by monetary institutions to central government and social security funds and

gross credit to other resident sectors, as well as other non-credit claims on these sectors. In addition to credits,

this category also contains government securities in the case of the central government sector, and debt

securities, shares and other equities, as well as instruments regarded as credits in a broader sense (such as

claims associated with financial leasing and bill of exchange discounting) in the case of other resident sectors.

Claims on non-residents, net

This category states the position of monetary institutions vis-à-vis non-residents in terms of net claims (assets

less liabilities), in a breakdown by bonds, shares and other equities, including portfolio investment and foreign

direct investment, as well as inter-company loans, derivatives and other instruments. The FDI within net

claims on non-residents does not include the stakes held by non-residents in other monetary financial

institutions.

Other assets, net

This category contains all (netted) assets and liabilities of monetary institutions which are not recorded in the

balance sheet as separate lines. This entry ensures that the balance sheet is in balance.


Hungary

has breached its reporting duty under ActLVIII 2001 on the National Bank of Hungaryand the legal regulation on OSAP.


As from 2003, money market funds will alsobe required to send in similar balance sheetsfor 1 January and the year-end to thoserequested from banks.


Data submitted to the NBH by banks includebanks’ balance sheets and profit and lossaccounts, detailed information on lending anddeposit transactions, etc. Banks submit dataelectronically to the NBH via a networkdeveloped to facilitate interbank payments.The NBH receives some of the data from co-operative credit institutions and non-financialcorporations via fax, floppy disk and e-mail.

The applicable accounting rules are laid downin Act C of 2000 on Accounting andGovernment Decree 250/2000 (XII 24) onthe duty of credit institutions and financial


Reporting institutions Balance sheet total

Number of % (of total % (of balancereporting category) sheet total of allagents* the institutions)

NBH 1 100.00 25.74

Other monetary financial institutions 227 100.00 74.26

Banks 30 100.00 62.89

Specialised credit institutions 8 100.00 6.39

Co-operative credit institutions 189 100.00 4.98

Savings co-operatives 183 100.00 4.92

Credit co-operatives 6 100.00 0.06

Total 228 - 100.00

* As from 2003, this will additionally include 16 money market funds.

2 Data reported exclusively by banks and specialised creditinstitutions are marked with an asterisk (*). Data reported from2003 not by all, but in total 41 savings co-operatives withbalance sheet totals in excess of HUF 5 billion are marked witha double asterisk (**).

enterprises to prepare annual financialstatements and bookkeeping.

Reporting frequency2:

• Daily:– Reporting on the gross book value of

certain claims on and liabilities toresidents.*

• Monthly:– Statutory balance sheet and profit and

loss account;– Other information;– Notes and coins* (from 2003: **).

• Quarterly:– Certain balance sheet items in further

detail (and from 2003 in countrybreakdown*).

• Annual:– Audited balance sheet data of credit

institutions.


Hungary


Main items:

• Daily:– Central bank interest rates.

• Monthly:– end-of-month balance sheet of NBH;– monthly average stock of individual

NBH balance sheet items constructedfrom daily stocks;

– financial derivatives;– notes and coins.

• Quarterly:– Certain balance sheet items in greater

detail in a breakdown by sector andmaturity, country and their currencycomposition.

• Annual:– Audited balance sheet.

The statistical reporting duties of the NBHare laid down in the AST. The NBH’sobligation to prepare annual financialstatements and the characteristics of itsbookkeeping obligation are set forth inGovernment Decree 221 of 2000.



The data are mainly end-of-period figures. Animportant exception is the monetary base,where average monthly stocks are derived asthe simple arithmetic mean of daily data.

2.10.2 Revisions

Within the framework of regular revisions,preliminary data are replaced monthly by final(revised) data, and end-of-the-year balancesheet data of credit institutions annually byaudited figures. There may also be ad hoc

revisions if significant errors are found duringon-site inspections at credit institutions.Provisional data and revisions are marked andexplained in footnotes.


Breaks in data are, as far as possible, removedfrom the published series. When a break inthe series is due to changes in definitions ormethodology, data are adjusted and madeconsistent with new definitions for the wholeseries, using estimates when required. If therecalculation of the series is not possible,breaks are highlighted in press releases,methodological notes and footnotes.

The effects of write-offs are reported byother monetary financial institutions.Transactions are calculated by removing theseand the effects of exchange rate changes fromthe differences of stocks. The methodologyof calculating flows is currently under revisiondue to the lack of a uniform frameworkacross various statistics. As from 2003, othermonetary financial institutions are requiredby the NBH to submit all tables relating tothe breakdown of flows under ECBRegulation 2001/13.


At the latest in June 2003, the NBH intendsto publish seasonally adjusted data formonetary aggregates. The seasonaladjustment will be carried out using TRAMO/SEATS.

2.11 Publication

2.11.1 First release of data(including the medium)

• The NBH’s preliminary statistical balancesheets are published monthly as pressreleases, 8 days after the end of thereference month.


Hungary

• The preliminary consolidated balance sheetof monetary institutions and figures formonetary aggregates are published monthlyas press releases, 14 days after the end ofthe reference month. (This publication willcease in 2003.)

• The NBH’s statistical balance sheet, theconsolidated balance sheet of othermonetary financial institutions, and theconsolidated balance sheet of monetaryinstitutions, as well as changes in monetaryaggregates, which comprise finalised data,are published monthly in a time seriesformat, 52 days after the end of thereference month (as from 2003, the seriesand the press releases on the consolidatedbalance sheet of monetary institutions andmonetary aggregates will be published onthe final trading day of the month followingthe reference month.)

The statistical data will be available for allusers outside NBH in the form of press

releases and series simultaneously madeavailable on the NBH website.

The NBH complies with SDDS regulations,and as well as with non-compulsoryrecommendations on some occasions.


All core monthly publications are listed in2.11.1 First release of data. There is noweekly publication.


Other main (occasional) publications:

• Working papers, methodological papersand background studies.

3 Contacts at the Magyar Nemzeti Bank


National Bank of HungaryStatistics Department,Monetary Statistics DivisionAddress: 1850 Budapest V., Hold u 4.Telefax: 36-1-428-2539Szilvia VeresTel: 36-1-428-2600/1721E-mail: [email protected]

ECB • Money, Banking and Financial M

arket Statistics in the Accession Countries – Volume I • M

ay 2003140

Hu

ngary

National Bank of Hungary Organisation Chart (31 December 2002)

Zsigmond JáraiPresident

Board of Directors

Monetary Council

Legal Department- Legal Services

- Legal Procedures

Secretariat

Dr. Erika KovácsManaging Director

Communications andInformationDepartment

- Communications

- Internal Communications

and Information

Human Resources Department- Human Resources

Development and

Consulting

- Human Resources

Planning and Payroll

Dr. ZsuzsannaArnold CsentericsManaging Director

Werner RieckeVice President

Monetary Policy Department- Money Market Analysis

- Monetary Regulations

- Monetary Programming

Statistics Department- Balance of Payments

- Monetary Statistics

- Financial Accounts

- Data Reception and

Preparation

Henrik AuthVice President

Péter AdameczVice President

György SándorManaging Director

Dr. Tamás KálmánManaging Director

Dr. Katalin BarátossyManaging Director

György GarancsiManaging Director

EditBuzogány-MándokiManaging Director

Éva GyöngyösyManaging Director

István HameczManaging Director

Chief Cashier’sDepartment

Payment Systemand Currency IssuePolicy Department

- Payment System and

Currency Issue and

Regulation

- Currency Issue and

Development

Regional BranchOffices

Department forCapital Projects

Banking Department- Bank Analysis

- Banking Systems

Analysis

Central BankSupervision Department- On-site Supervision Methodology- On-site Supervision

Regulation PolicyDepartment

Risk ManagementDepartment

Account Services Department- Customer Relations

- Settlement for Central

Bank Liabilities

- Settlement for Money

and Capital Market

Transactions

Information Technology Department- Change Management

- IT Development

- IT Operations

Property Services Department- Technical Services- Operations

- Mailing Services and

Archives

Accounting and Finance Department- Accounting

- Finance

- Foreign Exchange

Accounting

Department of Management Accounting and Financial Reporting- Balance Sheet Analysis

- Capital Investment and

Cost Controlling

Money and Foreign Exchange Markets Department- Foreign Exchange and

Open Market Operations

- Foreign Reserve

Management

Economics Department- Conjunctural

Assessment and

Projections

- Monetary Assessment

and Strategy

- Research

InternationalRelations Department

Department of Bank Security- Bank Security

- Human Risk

Management

- IT Security

Szilárd KirályManaging Director

Internal Audit Department- Operational Risk

Management

- IT Audit

- Financial Audit

Members of the Board of Directors

OperationsImprovementDepartment

Dr. György SzapáryVice President

Hu

ngary

An

nex 1


Hungary

Financial Accounts

Division

Monetary Statistics

Division

Statistics Department

Data Reception and

Preparation Division

Balance of Payments

Division

Annex 2

Organisation chart of the Statistics Department of the NBH (31 December 2002)


Hungary

Latvia

144

Latvia





EMU European Monetary Union


EU European Union


LVL Latvian Lats

NACE Statistical Classification of Economic Activities in the European Union



Latvia




The Governor of the Bank of Latvia (LatvijasBanka) is appointed by the Parliament of theRepublic of Latvia (the Saeima, the formerSupreme Council) upon the recommendationof at least ten Members of Parliament. TheDeputy Governor and members of the Boardof Governors are appointed by the Parliamentupon the recommendation of the Governorof the Bank of Latvia. They all are appointedfor a term of six years.

The Executive Board of the Bank of Latviaconsists of six persons drawn from the Bank’ssenior management by the Board ofGovernors. The Executive Board manages theBank’s day-to-day activities and implementsthe directives of the Board of Governors.

See Annex 1.

1.1.2 Organisation of statistical work atthe national central bank

See Annex 2.


The Bank of Latvia, Latvia’s central bank, is apublic law entity established by the Parliamentand operates under the Law on the Bank ofLatvia (adopted on 19 May 1992 and amendedin 1997, 1998, 1999, 2001 and 2002).

The Law on the Bank of Latvia is available onthe Bank’s website at:www.bank.lv/eng/main/lvbank/llb/




The Bank of Latvia is independent in theadoption of its decisions and in their practicalimplementation in accordance with Section 1of the Law.

Under the Law on the Bank of Latvia, theBank:

– is the sole bearer of the right to issue thenational currency (banknotes and coins);

– sets the exchange rate of the nationalmonetary unit against foreign currencies;

– promotes the smooth operation ofpayment systems in the Republic of Latvia,approves regulatory requirements andregulations to ensure efficient and soundfunctioning of the clearing and paymentsystems, and organises and ensures theoperation of the interbank payment systemin the Republic of Latvia;

– collects, registers and compiles financialand balance of payments statistics, andpublishes the compiled statistics;

– controls compliance with the regulationsand regulatory requirements it has issued.The control procedures are performedupon the Bank’s authorisation;

– upon receipt of specific authorisation fromthe Government, is entitled to act as theGovernment’s financial agent in bankingtransactions;

– issues licences to legal entities listed in theRepublic of Latvia Register of Enterprises,except credit institutions, for the purchaseand sale of foreign currency as a businessactivity.

146

Latvia



The main objective of the Bank of Latvia is toimplement monetary policy by controlling theamount of money in circulation with the aimof maintaining price stability in the country.

The Bank of Latvia advises the Parliamentand the Cabinet of Ministers on monetarypolicy and other matters pertaining to theexecution of the central bank’s tasks.

The Bank of Latvia keeps the State budgetresources and the resources of special fundsin accounts opened for the Government, andeffects the transfer of budget resources freeof charge. The Ministry of Finance of theRepublic of Latvia may receive informationon the State budget resources at any timeand follow the use of these resources.

The Bank of Latvia represents the Republicof Latvia in dealings with foreign central banksand international monetary institutions. TheGovernor of the Bank represents the Bank ofLatvia in relations with other banks, centraland local government institutions of Latviaand international financial organisations.

Where necessary for the execution of its tasks,the Bank of Latvia receives information fromthe Financial and Capital Market Commission,which is a supervisory authority, and from otherstate and governmental institutions.

More information on the objectives of theBank of Latvia is available on the Bank’swebsite at www.bank.lv.



Under Article 40 of the Law on the Bank ofLatvia, the Bank of Latvia collects, registers

and compiles banking and monetary statisticsand, since January 2000, balance of paymentsstatistics as well (see Annex 2). The Bank isalso responsible for reserve base statistics.

The Bank of Latvia publishes banking andmonetary statistics on a monthly and a quarterlybasis in its Monetary Bulletin and its MonetaryReview. The Bank also publishes an AnnualReport. The publications are available to thepublic on hard copy and on the Bank of Latvia’swebsite. Balance of payments statistics arepublished on a monthly (key items) and aquarterly basis and disseminated via the Bank’swebsite, in the monthly ‘Latvia’s Balance ofPayments (Key Items)’, and in the quarterly‘Latvia’s Balance of Payments’.

The Bank submits the collected data forpublication in the monthly InternationalFinancial Statistics of the InternationalMonetary Fund (IMF) and in the monthlyEconomic Indicators of Eastern Europe of theBank for International Settlements (BIS), aswell as in the information systems of Eurostatand the European Central Bank (ECB).

Since 1996, Latvia has subscribed to the IMF’sSpecial Data Dissemination Standard, whichapplies to the dissemination of key economicand financial data.


Under the Law on State Statistics, the CentralStatistical Bureau of Latvia is responsible forthe collection and publication of the country’sstatistical information on economic,demographic and social phenomena andprocesses, and on the environment. Thewebsite address of the Central StatisticalBureau of Latvia is www.csb.lv.

The Bank of Latvia has an agreement with theCentral Statistical Bureau of Latvia on co-operation in the area of statistics and theexchange of macroeconomic data.


Latvia

Under the Law on the Financial and CapitalMarket Commission (passed on 1 June 2000and in effect as of 1 July 2001), the Financialand Capital Market Commission regulates andmonitors the functioning of the financial andcapital markets and market participants(including credit institutions and creditunions). At least once a quarter, theCommission informs the Bank of Latvia andthe Ministry of Finance about the situation inthe financial and capital markets. The Financialand Capital Market Commission and the Bankof Latvia share statistics relevant for theexecution of their tasks.

The Bank of Latvia also has an agreementwith the Ministry of Finance of Latvia on the

exchange of statistical data relating togovernment finances, international reservesand foreign currency liquidity.

The Bank of Latvia, the Riga Stock Exchangeand the Latvian Central Depository exchangedata relating to the securities market. Thesedata include the amounts and types ofsecurities issued and owned by legal andnatural persons.


See Table 1.


Bank balance sheet statistics/ Interest rate statistics Securitiesmonetary aggregates and counterparts issues statistics

Table 1

Datacollected

The Monthly Financial Position Report ofCredit Institutions and its Appendices aresubmitted within six working days of theend of the reporting period.

Reporting population: credit institutionsand credit unions.

Preliminary aggregated data are availableon the ninth working day, and final dataon the 18th working day following thereporting period. Data collected are stockdata.

Aggregated data from the MonthlyFinancial Position Report of CreditInstitutions and its Appendices are usedin the calculation of monetary aggregates.

The Report on Interest Rates and Volumesof Non-bank Loans and Deposits is to besubmitted by the fifth day of the followingmonth.

Reporting population: all creditinstitutions and credit unions.

Final aggregated data are available on theninth working day after the reportingperiod.

The Report on Interest Rates and Volumesof Interbank Market Loans and Depositsis to be submitted on the next workingday after the seventh, 15th, 23rd and lastday of the reporting month.

Reporting population: all creditinstitutions.

Final aggregated data are available on thefourth working day after the reportingperiod.

Credit institutions submit reports onLatvian government securities holdings (aseparate report for each security) by theseventh day of the following month. Dataare stock data in nominal values. Finalaggregated data are available on the twelfthday after the reporting period.

The Bank of Latvia maintains a databaseon the issuance and redemption ofgovernment securities in breakdown bymaturity (1, 3, 6 and 12-month Treasurybills and 2, 3 and 5-year bonds).

The Financial and Capital MarketCommission collects information onsecurities issues from all public issuerswhen registering issues. Information onindividual issues of securities in publiccirculation is published immediately afterthe registration of the issue, i.e. is submittedto news agencies and put on the Financialand Capital Market Commission’s website(http://www.fktk.lv/tirgus/vertspapiri/emitenti)

All brokerage companies and creditinstitutions submit data on securitiesholders to the Financial and Capital MarketCommission no later than on the tenth dayafter the reference period.

The Latvian Central Depository keepssecurities accounts for all issuers andcustodians of securities in publiccirculation as well as debt securities issued

148

Latvia



Bank balance sheet statistics/ Interest rate statistics Securitiesmonetary aggregates and counterparts issues statistics

Table 1 (continued)

in private placements that are depositedwith the Latvian Central Depository. Dataare available on the website of the LatvianCentral Depository at http://www.lcd.lv/

Datacollected

Collectingagents

Bank of Latvia Bank of Latvia Bank of Latvia

Financial and Capital Market Commission

Latvian Central Depository

Users Bank of Latvia

Central Statistical Bureau of Latvia

Ministry of Finance of Latvia

Association of Latvian Commercial Banks


IMF, ECB, Eurostat, BIS

Bank of Latvia

Central Statistical Bureau of Latvia


IMF, ECB, Eurostat

Bank of Latvia

Latvian Central Depository


Riga Stock Exchange

Description Credit institutions submit their reportselectronically, using the interbank datatransmission network. Credit unionssubmit data on paper. Data are inputelectronically to obtain a Microsoft Excel2000 version. Data are stored by means ofthe Microsoft SQL server 2000.

For further information, please see Section2.5.

The reports include data on newly grantedloans and attracted deposits. Interest ratesare given as weighted averages.

Data are available in breakdown bymaturity and currency.

By maturityLoans

up to 1 month, 1 to 3 months, 3 to 6months, 6 months to 1 year, 1 to 5years, over 5 years

Depositsdemand, up to 1 month, 1 to 3months, 3 to 6 months, 6 months to1 year, 1 to 5 years, over 5 years.

By currencyLVL, currencies of OECDcountries, other foreign currencies.

Data are submitted on paper.

Data are input electronically to obtain aMicrosoft Excel 2000 version. Data arestored by means of the Microsoft SQLserver 2000.

The reports on Latvian governmentsecurities holdings are submitted to theBank of Latvia on paper. Data are inputelectronically to obtain a Microsoft Excel2000 version. Data are stored by means ofthe Microsoft SQL server 2000.

The Bank of Latvia maintains a databaseon the issue and redemption of governmentsecurities in breakdown by maturity (1, 3,6 and 12-month Treasury bills and 2, 3 and5-year Treasury bonds). Data are collectedon a security-by-security basis.

Upon registration of issues, the Financialand Capital Market Commission collectsthe data on a security-by-security basis.Issuers provide information directly.

The Financial and Capital MarketCommission collects statistics on securitiesholdings and provides the followinginformation:

– owner of securities (financialintermediaries, 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.Securities are valued at their market price.The maturity breakdown is not given.

The registration of securities in the safe-custody system of the Latvian CentralDepository fully complies withinternational standards. Each issue ofsecurities is assigned a unique InternationalSecurities Identification Number (ISINcode). The Classification of FinancialInstruments code is used for the descriptionof securities in accordance with the ISO10962 standard. Data are on a security-by-security basis.


Latvia

Statistical Reserve base Financial accounts Balance of payments Prudential supervisionareas

DataCollected

The reporting form entitled“Calculation of the ReserveRequirements” is submittedwithin five working days afterthe 15th day of every month,while the form “Report on theCompliance with the ReserveRequirements” is submitted bythe fifth day after the end of thereserve maintenance period,which starts on the 24th day ofthe month and ends on the 23rdday of the following month.

Reporting population: creditinstitutions.

Aggregated data are availableon the seventh working dayafter the reporting date.

The reserve requirements areapplied to the followingliabilities:

• all types of non-bankdeposits. Non-bank depositsattracted by branches ofLatvian banks locatedabroad are excluded. (As of23 December 2002, depositswith agreed maturity of over2 years, deposits with over2 years’ notice and repotransactions are excluded);

• issued securities (excludingdebt securities with originalmaturity of up to 2 years(including) where it can beproved that these securitiesare owned by other banks,and issued irrevocable debtsecurities with originalmaturity of over 2 years).

The reserve requirement is metwith the average end-of-daybalance on the reserve accountand the average vault cashbalance. (Currently, the cashcomponent is 30%. As of 24January 2003, the share of vaultcash in reserve holdings willbe reduced to 0%.)

The Central Statistical Bureauof Latvia collects non-bankbalance sheets and profit andloss accounts, data on thegeneral government budget andbudgetary organisations.

The Bank of Latvia providesthe Central Statistical Bureauof Latvia with its own balancesheet, the aggregated balancesheet of credit institutions andcredit unions, profit and lossaccounts and the aggregatedbalance sheet of the bankswhose licences have beenrevoked. Likewise, the Bank ofLatvia provides the CentralStatistical Bureau of Latviawith data on the country’sinternational investmentposition.

The Financial and CapitalMarket Commission providesthe Central Statistical Bureauof Latvia with the aggregatedbalance sheet of investmentcompanies, insurance com-panies and pension funds.

Depending on the type andsource, data are collected eitheron a monthly, quarterly orannual basis.

Financial accounts arepublished three months afterthe end of the reporting year.

The Bank of Latvia collectsdata on non-bank externalpayments. Banks report thesedata on the third working dayafter the seventh, 15th, 23rdand last day of the month. Non-banks report on incomingexternal payments made viadomestic banks and all externalpayments made via accountswith foreign banks by the fifthworking day of the followingmonth.

The Bank of Latvia conductssurveys on foreign investment(quarterly, by the 25th day ofthe following month; andannually, by the 25th day ofthe following month) and ontransportation and intermediaryservices (quarterly, by the 25thday of the following month).On a monthly basis, the Bankof Latvia also collects statisticson intermediation servicesrelated to job contracts forworking abroad (by the 15thday of the following month).

The Central Statistical Bureauof Latvia provides aggregateddata on foreign trade inbreakdown by country by the50th day after the reportingmonth and on travellers’expenditure by the 30th dayfollowing the reporting quarter.

The balance of payments dataare available:

– monthly data – on the 30thworking day following thereporting month;

– quarterly data – on the lastbusiness day of the quarterfollowing the reportingquarter;

– annual data – on the lastbusiness day of the quarterfollowing the last quarter ofthe reporting year.

Prudential reports:

• calculation of capitaladequacy, monthly;

• report on the maturitystructure of assets andliabilities, monthly;

• calculation of the liquidityratio, monthly;

• report on large exposures,monthly;

• report on exposures topersons connected with acredit institution, monthly;

• report on exposures exemptfrom restrictions onexposures, quarterly;

• report on exposures toresidents in zone Bcountries, monthly;

• report on country risk(exposures by country),monthly;

• report on the evaluation ofassets and off-balance-sheetitems (loan classificationand provisioning), quar-terly;

• report on qualifyingholdings and fixed assets,semi-annually;

• report on investments in themovable property and realestate and holdings in theshare capital of under-takings, semi-annually;

• report on the share capitaland subordinated capital ofcredit and financialinstitutions, semi-annually;

• report on the takeover ofholdings and holdings in theshare capital of ancillarybanking undertakings,semi-annually;

• private person deposits,semi-annually;

• consolidated prudentialreports, quarterly.

These reports are submitted bycredit institutions by the 15thday of the following month or,in the case of consolidatedreports, by the 15th day of thesecond month following thereporting date.

Table 1 (continued)

150

Latvia


Data are submitted on paper.

Data are input electronicallyto obtain a version of thereports in the Microsoft Excel2000 environment.

Statistical Reserve base Financial accounts Balance of payments Prudential supervisionareas

Collectingagents

Bank of Latvia Central Statistical Bureau ofLatvia

Bank of Latvia Financial and Capital MarketCommission

Users Bank of Latvia Central Statistical Bureau ofLatvia

Ministry of Finance of Latvia

Bank of Latvia

Eurostat

Bank of Latvia

Central Statistical Bureau ofLatvia

Ministries of Latvia

IMF, ECB, Eurostat, BIS

Financial and Capital MarketCommission

Bank of Latvia

Description Credit institutions submit theirreports electronically, using theinterbank data transmissionnetwork. Data are inputelectronically to obtain aMicrosoft Excel 2000 version.Data are stored by means ofthe Microsoft SQL server 2000.

Calculations are performedusing the ESA 95methodology.

All statistical surveys ofenterprises and all aggregateinformation from banks andinsurance companies arereceived on paper. Enterprisedata are stored electronically indatabases (ACCESS and FOXPRO). Worksheets of financialaccounts are calculated usingEXCEL.

Within the InternationalTransaction Reporting System,data on all non-bank externalpayments passing through thedomestic banks are collectedelectronically (threshold: LVL1,000).

Reports from non-banks aresubmitted on paper.

Data are input electronically toobtain a Microsoft Excel 2000report version. Data are storedby means of the Microsoft SQLserver 2000.


Table 1 (continued)



Articles 4 and 7 of the Law on State Statistics,which was adopted on 6 November 1997 andamended in 1999, define the organisation ofstate statistics in the Republic of Latvia andauthorise the Bank of Latvia to collect, recordand compile statistics within its fields ofresponsibility.

In accordance with Article 39 of the Law onthe Bank of Latvia, the Bank approvesstatistical reporting forms and the proceduresfor submitting such reports. Article 40 of theLaw requires the Bank to collect, registerand compile financial and balance of paymentsstatistics, as well as to publish the compiledstatistics (see website at www.bank.lv/eng/main/lvbank/llb/).

In order to receive information from creditinstitutions and credit unions required by

financial statistics and the national balance ofpayments, the Bank of Latvia has adopted theRegulation for Compiling the MonthlyFinancial Position Report and Its Appendices(approved by the Bank of Latvia’s Board ofGovernors, Resolution No. 88/7 of 12 July2001).


The Bank of Latvia compiles banking andmonetary statistics in accordance with theIMF’s recommendations set forth in theManual on Monetary and Financial Statistics.Likewise, the Bank of Latvia follows ECBrequirements laid down in Regulation (EC)No 2423/2001 of the ECB of 22 November2001 concerning the consolidated balancesheet of the monetary financial institutionssector (ECB/2001/13).

In order to provide the publication of data incompliance with the internationallyrecognised classifications, credit institutions


Latvia

and credit unions in the Republic of Latviaare required, when preparing statisticalreports, to use the Statistical Classificationof Economic Activities in the EuropeanCommunities, the codes for therepresentation of names of countries andtheir subdivisions (ISO 3166) and the codesfor the representation of currencies and funds(ISO 4217).



The boundaries of the economic territoryused for the purposes of monetary statisticsare the same as those of Latvia’s presentgeographic territory.

In order to define the sectors “Totaleconomy” and “Rest of the world” in thenational accounts, the definitions from theEuropean System of Accounts (ESA 95) havebeen used.

The definitions of residents and non-residentsprovided in the Bank of Latvia’s Regulation

for Compiling the Monthly Financial PositionReport and Its Appendices are as follows:

Residents are all institutions, including foreignones, registered and operating in the Republicof Latvia and private persons whosehouseholds are located in Latvia and whohave not left Latvia for a period of over oneyear (except students). Latvian diplomatic,consular and other representative officesabroad are also considered residents.

Non-residents are all institutions registeredabroad and private persons whosehouseholds are located outside Latvia or whoare staying in Latvia for a period of less thanone year (except students). Foreigndiplomatic and consular representativeoffices, offices of international institutions andother official representative offices in Latviaare also considered non-residents.

Foreign branches of domestic banks aretreated as non-residents and, conversely,foreign banks’ domestic branches are treatedas residents.

Offshore institutions are treated as residentsof their country of registration.

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Latvia


Non-residents include all institutions registered abroad. Latvian enterprisesand their branches registered abroad are regarded as non-residents, as areprivate persons residing and working in Latvia for less than one year, aswell as tourists, seasonal workers and foreign students.

Table 2



Centralbank

Bank of Latvia The Bank of Latvia is the central bank of the Republic of Latvia.

Creditinstitutions

Banks A credit institution is a business venture that has been established to accept deposits and otherrepayable funds, and to grant loans on its own behalf. A credit institution operates as a bank ora branch of a foreign bank.

Branches offoreign banks

Credit unions A credit union is a cooperative association with a variable number of members and capital,established to provide financial services to its members as stipulated by the Law on CreditUnions.

Money-holdingsector

Otherfinancialinstitutions

Financialintermediaries(includingfinancialauxiliaries)

Insurancecompanies andpension funds

Other financial institutions are institutions other than a central bank, a credit institution or amonetary financial institution that conduct investment and credit operations or provide financialintermediation services related to such operations. Other financial institutions include, forexample, insurance companies, pension funds, companies engaged in financial leasing andfactoring, export/import financing companies, pawnshops, investment funds, stock exchanges,broker companies, companies purchasing and selling currencies, and holding corporationsthat exercise direct management and control over subsidiaries involved in financialintermediation.

Non-financialenterprises

Publicenterprises

Privateenterprises

An enterprise is an economic entity producing goods or providing non-financial serviceswith the aim of gaining profit or other forms of yield. Sole proprietorships, farms and fishingfarms that are registered in the Republic of Latvia Enterprise Register are also regarded asenterprises in the Republic of Latvia.

Private persons are natural persons or groups of natural persons (households) whose principalactivity is consumption and who produce goods and services exclusively for their ownconsumption. Persons who are engaged in individual entrepreneurship but have not registeredtheir activity with the Republic of Latvia Enterprise Register are also treated as privatepersons.

Non-profit institutionsserving private persons

A non-profit institution serving private persons is an institution that provides goods andservices to private persons or groups of private persons and that derives resources mainlyfrom voluntary contributions in cash or kind. Such institutions include trade unions,professional or educational associations, consumers’ associations, political parties, churches,religious communities, as well as cultural, recreation and sports clubs, and charity, aid andsupport organisations.

Money-neutralsector

Government Centralgovernment(including thesocial securityfund)

Localgovernment

Central government is made up of governmental bodies, including ministries, embassies,representative offices, agencies, councils, educational establishments, as well as healthcare,jurisdictional, cultural and other governmental institutions that are financed from the centralgovernment budget.

Local government is made up of public institutions whose competence extends only to theirlocal economic territory. Local governments include public non-profit institutions controlledand financed by local government.

Non-residentsector

Non-residents1

EU countries

Other countriesandinternationalorganisations

EU countries

Non-EUcountries

1 The institutional breakdown for the non-resident sector is the same as for the resident sector.


2.2.2.1 Definition and classification of sectors in monetary statistics

Private persons


Latvia


The sectoral breakdown used for thepurposes of the Monthly Financial Position

Report differs slightly from the institutionalbreakdown in the ESA 95 (see Table 3): thesocial security fund comes under the centralgovernment, whereas these are statedseparately in the ESA 95.

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Latvia


S22


Table 3




Central bank S121

Central bank


S122


S12


Money-holdingsector

S123


and pension funds

Money-holdingsector

S124


S125



Non-financialenterprises

Public enterprises

Money-neutralsector

Government Central government(including socialsecurity funds)

S1311

Central government

Money-neutralsector

Money-holdingsector

n.a.

S1313

Local government

Non-residentsector

Non-residents 1) S211

EUcountries

S21

EU

S2

Rest of the world

Non-residentsector

S212


S1312

State/regionalgovernment

S1314


Bank of Latvia

Credit institutions Banks

Branches of foreignbanks

Other financialinstitutions

Financial intermediaries(including financialauxiliaries)

Private enterprises

Private persons

Non-profit institutions serving private persons

S11


S14

Households

S15


S13

General government

Local government

n.a.

EU

Other countriesand internationalorganisations

1) The institutional breakdown for the non-resident sector is the same as for the resident sector.

Credit unions


Latvia



According to the Law on Credit Institutions,a credit institution in the Republic of Latviaoperates either as a bank or a branch of aforeign bank (Article 3).

A credit institution is defined as a businessventure that has been established to acceptdeposits and other repayable funds from anunlimited number of customers, and to grantloans on its own behalf (Article 1).

See Table 4.


A credit union is a cooperative association witha variable number of members and capital, andis established to provide financial services to itsmembers as stipulated by the Law on CreditUnions. The principal financial services renderedby credit unions are as follows:

– accepting deposits and other repayablefunds from its members;

– lending to its members;

– trading money market instruments(cheques, bills, certificates of deposit, etc.),currency, financial agreements, securitieson its members’ instruction;

– issuing guarantees and other commitmentsby which it assumes the responsibility fordebts of its members;

– keeping valuables for its members;

– providing consultations to its memberswith regard to financial issues.


The Bank of Latvia does not include centralgovernment deposit liabilities in its measuresof money.



Bank of Latvia 1


Banks 22

Branches of foreign banks 1

Other monetary financial institutions 26

Credit unions 26

Total 50


A general outline of financial servicesprovided by credit institutions is included inthe Law on Credit Institutions (adopted on5 October 1995 and amended in 1996,1997, 1998, 2000 and 2002). According toArticle 1, item 4, these financial services aredefined as follows:

– accepting deposits and other repayablefunds;

– lending, also under the terms of financialleasing;

– money transmission services;

– issuing and servicing payment instrumentsother than cash;

– trading money market instruments(cheques, bills of exchange, certificates ofdeposit, etc.), foreign currency, financialcontracts and securities on its own and itscustomers’ behalf;

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Latvia


– trustee operations;

– safekeeping and administration ofsecurities;

– issuing guarantees (warranties) and othersuch statements of commitment thatobligate the issuer to assume theresponsibility for the debt of a third party;

– keeping of valuables;

– participating in the issue of shares and therendering of related services;

– providing consultations to its customerson financial issues;

– intermediating in the market of moneyinstruments;

– providing information related to thesettling of customer liabilities;

– other transactions similar in nature to theabove-mentioned financial services.

The types of deposit listed under Article 67are:

– demand deposits of indefinite maturity, tobe paid out on demand;

– time deposits;

– deposits with agreed maturities;

– deposits with indefinite maturities,requiring prior notice of withdrawal.

Time deposits placed with a credit institutionfor an indefinite term cannot be withdrawnany earlier than one month after the depositis received. An application for withdrawal hasto be submitted ten days prior to thewithdrawal date unless the agreementspecifies otherwise.



The Regulation for Compiling the MonthlyFinancial Position Report of CreditInstitutions and Its Appendices, which wasapproved by the Bank of Latvia’s Board ofGovernors Resolution No. 88/7 of 12 July2001, came into effect on 1 January 2002.This Bank of Latvia Regulation introducedthe ECB’s statistical reporting requirements(ECB Regulation ECB/2001/13), so that theinformation needed to prepare Tables 1, 2, 3and 4 of the ECB Regulation can now bedrawn from the aggregated Monthly FinancialPosition Report of credit institutions andcredit unions.

The Monthly Financial Position Report ofcredit institutions and credit unions providesend-of-month stock data on assets, liabilities


Latvia

Assets Liabilities

Vault cash and deposits with the Bank of Latvia

Claims on credit institutions and foreign central banks

Loans

Debt securities (including other fixed income securities)

Shares and other variable income securities

Holdings in the share capital of associated enterprises

Holdings in the share capital of affiliated enterprises

Derivatives

Intangible assets

Fixed assets

Own shares

Other assets

Transit credit

Prepaid expenses and accrued income

Liabilities to the Bank of Latvia

Liabilities to credit institutions and foreign central banks

Deposits

Issued debt securities

Derivatives

Other liabilities

Transit funds

Deferred income and accrued expenses

Provisions

Subordinated liabilities

Equity

Trust assets (memo item)

Trust liabilities (memo item)

Off-balance-sheet items

Contingent liabilities

Liabilities to customers

and off-balance-sheet items. The main itemsof the Report are presented in the above table.


All items in the Monthly Financial PositionReport are broken down by the residencyprinciple (residents and non-residents) and bycurrency. The currency breakdown is subdividedinto national currency and foreign currencies;the latter is further divided into OECD country

currencies and other currencies. The mainbalance sheet items are also broken down byindividual currencies (among them the euro).All amounts are translated into lats.

The sectoral (counterparty) breakdown isshown in Table 2. More detailed breakdownsare available in the Appendices to the MonthlyFinancial Position Report (disclosing also EMUcountries).

The instrument/maturity categories of theMonthly Financial Position Report are shownin the next table. All maturities are based on

demandwith agreed maturity

up to 6 months

6 to 12 months

1 to 2 years

2 to 5 years

over 5 years

redeemable at notice

up to 3 months

3 months to 1 year

1 to 2 years

over 2 years

repo

Claims on and Loans Debt securities Depositsliabilities to credit (including otherinstitutions and fixed incomeforeign central banks securities)


up to 6 months

6 to 12 months

1 to 2 years

2 to 5 years

over 5 years

redeemable at notice

up to 3 months

3 months to 1 year

1 to 2 years

over 2 years

reverse repo (repo)


up to 6 months

6 to 12 months

1 to 2 years

2 to 5 years

over 5 years

with maturity to redemption,as at the time of issuance

up to 6 months

6 to 12 months

1 to 2 years

2 to 5 years

over 5 years

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Latvia


the original maturity or on the period ofnotice and are stated inclusive of their upperlimit.

Additional monthly information on loans isavailable in breakdown by instrument:overdraft, commercial credit, industrial credit,reverse repo transactions, bills of exchange,financial leasing, payment card credit,consumer credit, mortgage loans, factoringand others. Additional quarterly informationis available on the main balance-sheet itemsbroken down by country. Loans granted byother financial institutions and non-financialenterprises to the national economy arebroken down in accordance with theStatistical Classification of EconomicActivities in the European Union (NACE).



The Bank of Latvia compiles and disseminatesa narrow monetary aggregate (M1), anintermediate one (domestic money supply,M2D) and a broad one (M2X), using the

Box 1 M1 includes:

– currency outside banks (currency in circulation, excluding banks’ cash balances);

– demand deposits in lats.

M2D includes:

– M1;

– deposits in lats (deposits with agreed maturity, deposits redeemable at notice and repo transactions).

M2X includes:

– M2D;

– deposits in foreign currency.

national methodology. Government depositliabilities are not included in the definition ofthe monetary aggregates. See Box 1.

The sectorisation of deposits is as follows:other financial institutions, public enterprises,private enterprises, private persons and non-profit institutions serving private persons.

For internal purposes and to meet therequirements of the ECB, the Bank of Latviaalso compiles monetary aggregates M1, M2and M3 in accordance with the ECB’smethodology. In 2000 and 2001, the Bankcompiled estimated data and, as of January2002, has started producing exact time series.


Currency outside banks and demand depositsare transferable instruments included in themonetary aggregates. As mentioned above,the central bank is the only issuer ofbanknotes and coins. The sector breakdown –other financial institutions, public enterprises,private enterprises, private persons and non-profit institutions serving private persons – isavailable for demand deposits. The national


Latvia

definition does not provide for the inclusionof holdings of securities issued by banks inthe monetary aggregates. In 2003, the Bankof Latvia, in collaboration with the LatvianCentral Depository, plans to start collectingdata on holders of securities.


Counterparts of money, as disclosed in themonetary survey (consolidated accounts ofthe Bank of Latvia and credit institutions andcredit unions), are shown in Box 2.

Domestic credit is shown in breakdown bysector, currency, maturity and type (seeSection 2.5.2).

Box 2Net domestic assets

Domestic credit

Credit to the Government (net)

Covers credit to the central government and local governments

Credit to enterprises and private persons

Includes loans to other financial institutions, public enterprises, private enterprises, private persons and

non-profit institutions serving private persons

Other items (net)

Net foreign assets

Box 3Monetary base (Reserve money) M0 comprises:

– currency in circulation,

– demand deposits in lats with the Bank of Latvia

– demand deposits in foreign convertible currencies with the Bank of Latvia.

2.8 Reserve money

Reserve money includes currency incirculation and demand (transferable)deposits with the Bank of Latvia in thenational currency – the lats – and in foreigncurrency (see Box 3).

Demand deposits include demand deposits ofcredit institutions, credit unions and otherfinancial institutions.



Article 40 of the Law on the Bank of Latviastates that “the Bank of Latvia shall collect,register and compile financial and balance of

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Latvia


payments statistics, as well as publish thecompiled statistics; such information shall notbe published in a way that would make itpossible to identify, directly or indirectly, anynatural or legal person”.

Under Article 21 of the Law on StateStatistics, respondents (natural persons orofficials at enterprises or other institutions)are liable if they violate the procedure forcollecting statistical data, delay the submissionof data or refuse to submit information incompliance with the procedures laid downby the normative acts.

The Statistics Department of the Bank ofLatvia acts as the collecting agent formonetary statistics.


See Table 5.


For monetary statistics purposes, thereporting population consists of all licensedcredit institutions and credit unions in theRepublic of Latvia.

The Monthly Financial Position Report andits Appendices (containing full balance-sheetdata) are collected from all credit institutionsand credit unions. The reporting form has to

be 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 thereporting period and are used for analysis.The final data are disseminated to the publicon the 18th working day after the reportingperiod. Data are given in lats and on a stockbasis. When preparing daily balance sheets,Latvian credit institutions and credit unionsmust comply with the InternationalAccounting Standards. Financial instrumentsshould be revalued on a regular basis andreported at their market value. Itemsdenominated in foreign currencies aretranslated into lats, using the end-of-periodexchange rates set by the Bank of Latvia.Banks submit data electronically, using theinterbank data transmission network. Creditunions submit data on paper. Data are inputelectronically to obtain a Microsoft Excel2000 report version and are stored by meansof the Microsoft SQL server 2000.

Reporting schemes for interest rate statisticsand reserve base statistics are listed in Table 1.


The Bank of Latvia prepares its balance sheeton a daily basis. The Bank of Latvia’s month-end balance sheet is made available to thepublic on the Bank’s website and in print bythe 12th day of the following month.



Number % of the total % of the totalcategory balance sheet

of all institutions

Bank of Latvia 1 100 19.3


Banks 22 100 77.5

Foreign bank branches in Latvia 1 100 3.1

Other monetary financial institutions 26 100 0.1

Credit unions 26 100 0.1

Total 50 - 100


Latvia

The balance sheet of the Bank of Latvia isprepared in accordance with the historicalcost basis of accounting, modified for therevaluation of certain assets and liabilities asmentioned below:

– gold and financial instruments denominatedin foreign currencies are marked tomarket;

– financial assets and financial liabilitiesarising from derivative financial instrumentsare revalued on a regular basis andreported in the balance sheet at their fairvalue;

– loans to credit institutions are recorded inthe balance sheet at the outstandingprincipal balance, adjusted for any specificcredit risk provisions for loan impairment;

– Latvian central government securities arecarried in the balance sheet at their fairvalue.

The Bank of Latvia’s balance sheet is structuredin accordance with the principle of residencyand sectors established by the ESA 95.



Data are end-of-period figures, with theexception of interest rate statistics on newbusiness.

2.10.2 Revisions

Preliminary aggregated data in the MonthlyFinancial Position Report, which are compiledon the ninth working day after the close ofthe reporting period, can be revised asproposed by the credit institution or thecredit union. The final data are thendisseminated via the Bank of Latvia’s website.If revisions are made after the monthly

publication, they are reported as such andare accompanied by explanatory notes.Quarterly data published in the quarterlyMonetary Review are final. However, in caseof reclassification, data may be revised over alonger time period. Revised data are indicatedas such in the relevant publications.

At least one month’s advance notice is givenof changes in the methodology via the Bankof Latvia’s website. Information about changesin the methodology is also provided at thetime the data compiled using the new methodare first published.


Monthly flows are calculated using the Bankof Latvia’s balance sheet data and creditinstitutions’ aggregated monthly financialposition report data. Flow statistics arecompiled by the Bank of Latvia for its ownuse and are not published. Monthly flows arecalculated as the difference between theprevious and current end-month amountsoutstanding, minus adjustments. The mainitems of the credit institutions’ aggregatedbalance sheet are adjusted for valuationeffects arising from changes in the exchangerate of the lats against foreign currencies.Where changes occur due to reclassificationor reporting population, the stocks of datacan also be adjusted according to thecharacteristics of the time series. In caseswhere adjustments are difficult, they are notmade for past periods.

In 2003, the Bank of Latvia plans to removeeffects arising from changes in the prices ofsecurities and write-offs/write-downs of loansfrom statistical data.


The Bank of Latvia makes seasonaladjustments to monetary aggregates (M1,M2D and M2X in accordance with thenational definition), using the automated

162

Latvia


software packages TRAMO/SEATS forWINDOWS and DEMETRA.

Since time series are too short, seasonallyadjusted time series are not published, butare used internally for the purpose of analysis.

2.11 Publications

2.11.1 First release of data(including medium)

Monetary statistics are first released byposting them on the Bank of Latvia’s websiteat www.bank.lv/eng/main/finfo/lbfinfo inaccordance with the Advance ReleaseCalendar.

Data (given in millions of lats) aredisseminated in the Analytical Accounts ofthe Banking Sector, which cover the Bank ofLatvia, credit institutions and credit unions.

The Analytical Accounts of the Banking Sectorcomprise the following information:

– Broad money (M2X)

– Currency outside banks

– Deposits of domestic enterprises andprivate persons

– Demand deposits

– Time deposits

– Deposits with banks whose activitieshave been suspended

– Domestic money supply (M2D)

– Narrow money (M1)

– Gross foreign assets

– Net foreign position

– Net domestic assets

– Short and long-term credits todomestic enterprises and privatepersons

– Net credit to the Government.

The Analytical Accounts of the Bank of Latviacomprise the following information:

– Monetary base (M0)

– Currency in circulation

– Bank deposits in lats with the Bank ofLatvia

– Bank deposits in foreign convertiblecurrencies with the Bank of Latvia

– Net foreign position

– Net domestic assets

– Credit

– Banks

– Central government (net)

– Other credit (net)

– Other items (net).

The Analytical Accounts of the Bank of Latviaand the Analytical Accounts of the BankingSector are compiled on a monthly basis. Theformer are available on the last working dayof the second week following the referencemonth and the latter within the next monthfollowing the reference month.


Since December 1994, monthly time serieshave been published in the monthly MonetaryBulletin. In general, the monthly reportscontain the same information that constitutesthe first release (see Section 2.11.1); theconsolidated balance sheet of creditinstitutions is also shown. The publication is


Latvia

available to the public in Latvian and Englishforty days after the reporting month on hardcopy and on the Bank of Latvia’s website.


The quarterly Monetary Review has beenpublishing monthly time series data since January1993 and includes a wide set of tables containingmonth-on-month changes and stocks coveringthe monetary survey, the liquidity of the bankingsystem, the structure of broad money, theconsolidated balance sheet of credit institutions,and deposits and loans of enterprises and privatepersons. The publication is available to the publicin Latvian and English three months after thereporting quarter on hard copy and on theBank’s website.

The Annual Report, the main publicationcovering the Bank of Latvia’s activity, has beenpublished in Latvian and English since 1992.This publication includes the annual financialstatements, the Executive Board’s report, aswell as information on monetary policy,economic indicators, developments in thebanking sector, international co-operationand the Bank’s organisational structure. TheAnnual Report also contains a monetarypolicy calendar and appendices with monetaryindicators and data from the Bank’s balancesheet and profit and loss account, as well asexchange rates. The publication is releasedto the public on the Bank’s website in Aprilfollowing the reporting year and on hard copyin May.

3 Contacts at the Bank of Latvia


Banking and Monetary Statistics Division,Bank of Latvia,K. Valdemara 2A,Riga,LV-1050, Latvia

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Latvia


The Bank of Latvia’s Structure

Annex 1

BOARD OF

GOVERNORS

Governor

Deputy Governor

Office Internal Auditing

Department

EXECUTIVE BOARD

Chairperson of the Executive Board

Deputy Chairpersons

of the Executive Board

Information Systems Department

Monetary PolicyDepartment

Public Relations Department

Payment Systems Department

Foreign ExchangeDepartment

Legal Department

Statistics Department Accounting Department Foreign Relations Department

Communications Department Construction Department Security Department

General ServiceDepartment

Cashier’s and MoneyOperations Department

Personnel Department

Study and Recreation Centre

Riga Branch Daugavpils Branch

Valmiera Branch

Governor’s

Liepaja Branch-Rezekne Branch-


Latvia

STATISTICS DEPARTMENT

Head of the Statistics Department

Deputy Head of the Statistics Department

Banking and Monetary Statistics

Division

Balance of Payments Statistics

Division Statistics Analysis Division

1

1. Performs graphical analyses

of data using the SAS

(Statistical Analysis System)

for the Bank's management,

other departments of the Bank

of Latvia and different

publications.

2. For internal needs, produces

seasonally adjusted time series

and forecasts.

3. Performs sampling,

estimation and evaluation of

the quality of data for sample

surveys.

4. Works on threshold issues

and optimization of the

settlement system for cross-

border payments.

1. Collects and compiles the

balance of payments,

international investment

position and foreign direct

investment statistics (as of Q1,

2000).

2. Ensures the dissemination

of balance of payments,

international investment

position and foreign direct

investment statistics through

the Bank of Latvia's website

and printed publications.

Submits data for the ECB,

Eurostat, the IMF and the BIS.

3. Maintains the

methodological description for

Latvia's balance of payments

data category on the IMF's

website in accordance with

SDDS requirements.

4. Carries out methodological

work to ensure compliance

with international standards

for the balance of payments

compilation. Reviews and

develops the description of the

methodology. Develops and

reviews data collection.

1. Collects and compiles

banking and monetary

statistics, as well as reporting

forms for prudential

supervision.

2. Collects, compiles and

submits data for publication in

the IMF monthly

International Financial

Statistics, the BIS monthly

Economic Indicators of

Eastern Europe, the ECB and

Eurostat information systems.

3. In collaboration with other

departments of the Bank of

Latvia, it ensures the

availability of banking and

monetary statistics on the

Bank's website, maintains

methodological descriptions

for data categories on the

IMF's website in accordance

with SDDS requirements.

4. Develops and reviews

reporting forms with respect to

banking and monetary

statistics to follow

methodological changes.

Structure of the Statistics Department at the Bank of Latvia

1) As of 1 March 2003, the name of the division and its functions will be changed.

Annex 2

166

Latvia


Lithuania


Lithuania


BoL Bank of Lithuania


CCUoL Central Credit Union of Lithuania


CISD Credit Institutions Supervision Department

CSD Central Securities Depository



ESCB European System of Central Banks

EU European Union

EUR euro

GSD General Statistics Division




LSC Lithuanian Securities Commission

LTL Lithuanian litas

MOD Market Operations Department


MPD Monetary Policy Department

MSAD Monetary Statistics and Analysis Division

NSEL National Stock Exchange of Lithuania

OECD Organisation for Economic Co-operation and Development

SL Statistics Lithuania (Lithuanian Department of Statistics)

VILIBID Vilnius interbank bid rate

VILIBOR Vilnius interbank offered rate


Lithuania




Lietuvos bankas – the Bank of Lithuania (BoL)– is governed by the Board of the BoL whichconsists of a Chairperson, three DeputyChairpersons and seven members.

The activities of the BoL are organised by theChairperson of the Board. The Chairpersonis appointed for a term of five years by theSeimas (Parliament) of the Republic ofLithuania upon the nomination by thePresident of the Republic of Lithuania. TheDeputy Chairpersons and Members of theBoard are appointed for a term of nine yearsby the President of the Republic of Lithuaniaupon nomination by the Chairperson of theBoard. One third of the Board of the BoL isrenewed through rotation every three years,with the exception of the Chairperson andone Deputy Chairperson.

The functions of the BoL are performed byten departments, five autonomous divisionsand two branches in Kaunas and Klaipëda.

See Annex 1.


The BoL does not have a separate statisticaldepartment. The statistical work at the BoLis mainly performed by the Monetary PolicyDepartment (MPD). However, some activitiesare also carried out by the Market OperationsDepartment (MOD) and the CreditInstitutions Supervision Department (CISD).The MPD is responsible for the monetarypolicy statistics, monetary statistics, financialmarket and interest rate statistics andinternational reserves and balance ofpayments (b.o.p.) statistics. The MODprocesses and disseminates data on theinterbank market interest rates VILIBID and

VILIBOR, on auctions of governmentsecurities and on official exchange rates. TheCISD collects and processes the balance sheetreporting returns, profit and loss accountsand other returns for prudential supervisorypurposes from credit institutions (CIs).

The MPD manages money and banking statisticsin two divisions: the Monetary Statistics andAnalysis Division (MSAD) and the GeneralStatistics Division (GSD); they are also managedin the Domestic Market Operations Division ofthe MOD. The MSAD is responsible formonetary statistics, while the GSD deals mainlywith other banking statistics. The DomesticMarket Operations Division is responsible forthe VILIBID and VILIBOR interbank marketinterest rates, as well as for governmentsecurities issue statistics.


The legal framework for the statisticalactivities of the BoL is provided by thefollowing laws:

• Law on Statistics (adopted on 12 October1993, No. I-270; amended on 23 December1999, No. VIII-1511)The law establishes the generalorganisational principles of officialstatistics, the rights and duties ofrespondents and collecting agents, as wellas other aspects concerning the productionof official statistics. Article 6 (1) of this lawdescribes the BoL as one of the agenciesmanaging official statistics. Article 10 (1)empowers the BoL to collect, process,compile, analyse and disseminate statisticalinformation independently.The complete text of this law can be foundat www.std.lt in the “Legal basis” section.

• Law on the Bank of Lithuania (adopted on1 December 1994, No. I-678; last amendedon 13 March 2001, No. IX-205)The law sets the legal framework for theactivities of the BoL, its objectives,


Lithuania

functions, responsibilities and otheraspects of its performance. Article 8 (9) ofthis law empowers the BoL to collectmonetary, banking and b.o.p. statistics, aswell as data on Lithuanian financial andrelated statistics; to implement standardson the collection, reporting anddissemination of the said statistics; and tocompile the b.o.p.The complete text of this law can be foundat www.lb.lt in the “Legal Acts” section.




The national central bank of the Republic ofLithuania is the BoL, which belongs by rightof ownership to the State of Lithuania. TheState of Lithuania is not liable for theobligations of the BoL, and the BoL is notliable for the obligations of the State ofLithuania. The BoL is governed by theConstitution, laws, international agreementsand other legal acts of the Republic ofLithuania. The BoL maintains relations withforeign and international financial institutions,concludes agreements with them andrepresents the State of Lithuania ininternational financial institutions. The BoLhas the exclusive right to issue banknotesand coins of the Republic of Lithuania.

The primary objective of the BoL is to seekprice stability. The Bank, within the range ofits competence, supports the economic policycarried out by the Government of theRepublic of Lithuania, without prejudice toits primary objective.

The main functions of the BoL are as follows:

• to issue the currency of the Republic ofLithuania;

• to formulate and implement monetarypolicy;

• to determine the Litas exchange rateregulation system;

• to manage, use and dispose of the BoL’sforeign reserves;

• to act as a State Treasury agent;

• to issue and revoke licenses of CIs and tosupervise the activities thereof;

• to establish principles and procedures forthe financial accounting and reporting ofCIs;

• to develop and manage an interbank fundstransfer system; and

• to collect monetary, banking and b.o.p.statistics, as well as data on Lithuanianfinancial and related statistics; toimplement standards on the collection,reporting and dissemination of the saidstatistics; and to compile the b.o.p. of theRepublic of Lithuania.

In implementing its objectives and carryingout its functions, and pursuing activitiesnecessary for these purposes, the BoL actsindependently from state bodies andinstitutions of the Republic of Lithuania aswell as other enterprises, institutions andorganisations. The BoL twice a year presentsreports to the Seimas on the implementationof its primary objective, on the performanceof its functions and on the situation of thebanking system.


In order to implement its primary objective, theBoL is responsible for the system regulating theLithuanian litas (LTL) exchange rate. Governedby this system, the BoL determines andannounces the official LTL exchange rate. Theofficial LTL exchange rate is established againstthe currency chosen as the anchor currency(since 2 February 2002, the euro) according tothe procedure laid down in the Law on the


Lithuania

Credibility of the Litas (adopted on 17 March1994, No. I-407; last amended on 5 April 2001,No. IX-236). According to this law, the BoLmust also ensure that all its liabilities in LTLshall be fully backed by gold and foreignexchange reserves.

The BoL, in implementing its monetary policy,is responsible for the selection of monetarypolicy instruments. It establishes proceduresand terms for rediscount, loan and depositfacilities as well as open market operationswith CIs, and the procedure for the holdingof required reserves for CIs.

The BoL is responsible for the management,usage and disposal of foreign reserves of theBank with the view to implementing itsprimary objective and ensuring the reliabilityof the system for the regulation of the litasexchange rate.

The BoL is responsible for licensing andsupervising CIs. It issues and revokes licensesand permissions, establishes prudentialrequirements and supervises the activities ofCIs.

The BoL manages the treasury accounts andaccounts of state funds, as well as organisingthe issue and redemption of governmentsecurities. It consults and makes proposals tothe Government on issues related to financialmarkets and State Treasury policy. The BoLis prohibited from lending to the Governmentand other institutions belonging to theexecutive authority, state and municipalenterprises, or to purchase securities thereofon the primary market.



The BoL is responsible for macroeconomicstatistics in the areas of money and banking

statistics, reserve base, b.o.p. and prudentialsupervision.

Bank balance sheet statistics/monetaryaggregates and counterparts are compiled anddisseminated by the MSAD of the MPD, whilethe balance sheet reporting returns of CIscurrently used for this purpose are managedby the CISD. The MSAD is also responsiblefor the design and implementation of newbalance sheet reporting returns andinstructions in order to meet therequirements of ECB Regulation ECB/2001/13. Interest rate statistics on loans anddeposits and on interbank money depositsare collected, compiled and disseminated bythe GSD of the MPD. The VILIBID andVILIBOR interbank market interest rates andgovernment securities issue statistics arecompiled and disseminated by the DomesticMarket Operations Division of the MOD.

Data on the reserve base are collected bythe Monetary Policy Instruments Division ofthe MPD. The source of data is specialreports from CIs subject to reserverequirements, which are used only for reserverequirements purposes.

Data on b.o.p. and the internationalinvestment position (i.i.p.) are compiled anddisseminated by the Balance of PaymentsDivision of the MPD. The data used for thispurpose are collected from various sources.Statistics on international reserves andforeign currency liquidity are compiled anddisseminated by the MSAD of the MPD.

Data required for prudential supervision ofthe banking sector are collected and compiledby the CISD. This information consists mainlyof various breakdowns of balance sheet items.

The BoL is also responsible for co-ordinatingthe IMF Special Data Dissemination Standardsystem in Lithuania.


Lithuania


Statistical activities of other public authoritiesare governed by the Law on Statistics. Thislaw obligates Statistics Lithuania (SL), itsregional offices, ministries and other stateand government institutions to be responsiblefor managing official statistics. It also specifiesSL’s central role in the production anddissemination of statistics. SL implementsgeneral state policy concerning themethodology and organisation of statistics,and co-ordinates the statistical activities ofministries and other institutions. SL activelypursues co-operation with providers ofinformation for the timely transfer of data toSL.

SL is responsible for statistics on nationalaccounts, production indices, labour market,price indices, merchandise trade, business,

investment and population. The Resolutionof the Government of the Republic ofLithuania on the Implementation of theEuropean System of Accounts (adopted on16 May 2001, No. 569) outlines that theMinistry of Finance (MoF) and the BoL,respectively, shall provide all data in theirpossession that are required for thecompilation of national accounts statistics.

The MoF, in co-operation with SL, isresponsible for public finance statistics.

The BoL, SL and the MoF co-operate on thestatistical methodology, as well as in thecollection, compilation and dissemination ofmacroeconomic statistics.

1.3.2.3 Overview of statistical data collection andcompilation methods

See Table 1.

Table 1



and counterparts

Collected data a) Central bank accountingbalance sheet.Frequency: daily.Timeliness: within 1 day afterthe end of the reference day.

b) Bank balance sheet report.Frequency: monthly.Timeliness: within 8 days afterthe end of the reference month.

c) Credit union balance sheetreport.Frequency: quarterly.Timeliness: within 7 days afterthe end of the referencequarter.

d) Central credit union balancesheet report.Frequency: monthly.Timeliness: within 8 days afterthe end of the reference month.

a) Bank interest rates on loans and deposits.Frequency: monthly.Timeliness: within 10 days after the end of thereference month.

b) Interest rates on interbank money deposits.Frequency: weekly.Timeliness: by 2 p.m. (local time) on Monday.

c) Interbank market interest rates VILIBID andVILIBOR.Frequency: daily.Timeliness: at 11 a.m. (local time).

a) Primary market ofgovernment debtsecurities.Frequency: auction days(usually weekly).Timeliness: at about 12noon (local time) on theauction day.

b) Primary market ofcorporate debt securitiesand equities.Frequency: issue days.Timeliness: when theLSC registers a newissue.

c) Secondary market ofgovernment debtsecurities and corporatedebt securities andequities.Frequency: trading days(usually daily).Timeliness: 1 hour afterthe end of the tradingsession.


Lithuania

Table 1 (continued)



and counterparts

Description

Collecting agents BoL BoL

Users

a) BoL and MoFb) LSCc) NSEL

BoL, SL, MoF, other governmentministries, IMF, OECD, Eurostat,ESCB and the general public

BoL, SL, government ministries, financial institutions,international organisations and the general public.

BoL, MoF, SL, LSC, CSD,international ratingagencies, financialinstitutions, investors andother users

Collected data are stocks at theend of the reference period.Data are collected electronically.Users at the BoL have access tothe internal database.

a) Bank interest rates on loans and time deposits arebased on the amount of new business and calculated asa weighted average. Bank interest rates on demand andsavings deposits are based on amounts outstanding andcalculated as a weighted average. Data are collectedelectronically. Bank interest rates on loans and depositsare firstly published on the BoL website within 2 weeksafter the end of the reference month.

b) Interest rates on interbank money deposits are basedon transactions and calculated as a weighted average.Data are collected electronically.

c) VILIBID and VILIBOR are based on the quotes of atleast five of the most active banks. VILIBID andVILIBOR are first released on Reuters page“LTBANK08” and the BoL website by 12 p.m. (localtime).

For more details, see the ECB publication Money,Banking and Financial Markets Statistics in theAccession Countries, Volume II.

a) Data on government debtsecurities issues are releasedimmediately after theauction on the BoL website.Information on governmentdebt securities is alsoavailable on the MoFwebsite at www.finmin.lt.

b) The LSC collectssecurity-by-securityinformation on corporatedebt securities and equitiesissued by public companies.Annual aggregated data areavailable on the LSCwebsite at www.lsc.lt.

c) The summary of tradingresults, changes in indices,market capitalisation andother information areavailable on the NSELwebsite at www.nse.lt andin periodic NSEL bulletins.

For more details, see theECB publication Money,Banking and FinancialMarkets Statistics in theAccession Countries:Volume II.


Lithuania

Table 1 (continued)


Collected data

Collecting agents

Users

Description

BoL SL BoL, SL, ministries, otherofficial agencies

BoL

BoL All interested users All interested users BoL

Credit institution report onliabilities in LTL and inforeign currencies for thepurpose of calculating thereserve base and requiredreserves.Frequency: monthly.Timeliness: within 12 daysafter the end of the month

a) Banking survey and bankbalance sheets;

b) b.o.p.;

c) Registers of governmentsecurities issues and debt;

d) Reports on non-financialenterprises, brokerage firmsand insurance companies;

e) Information provided bythe NSEL;

f) Statistics of central andlocal government revenueand expenditure and publicdebt provided by the MoF.

Frequency: annual.

a) Monthly data.Timeliness: within 30working days after the endof the reference month.Sample data are collectedby the BoL directly fromsurveys of selectedeconomic entities.

b) Quarterly data.Timeliness: within 3 monthsafter the end of thereference quarter.Main data are collectedfrom SL, MoF, CSD, LSC,other government agencies,banks and the BoL.

a) Report on the structure ofbank assets and liabilities bymaturity.Frequency: monthly.Timeliness: within 11 daysafter the end of thereference month.

b) Report on the foreignexchange exposure account.Frequency: monthly.Timeliness: within 11 daysafter the end of thereference month.

c) Report on maximumexposure.Frequency: monthly.Timeliness: within 11 daysafter the end of thereference month.

d) Report on capitaladequacy of the bank.Frequency: quarterly.Timeliness: within 11 daysafter the end of thereference quarter.

The reserve base comprisesliabilities specified by theBoL vis-à-vis residents(except the BoL and otherCIs subject to the reserverequirements of the BoL)and non-residents asrecorded in the monthlybalance sheets of a creditinstitution. Information iscollected electronically.Collected data are used forreserve requirementpurposes only.

Data are collected by mailor electronically, and thencompiled in MS Excel files.Financial accounts for1997 – 2000 have beenboth submitted to Eurostatand published domestically.

The b.o.p. data are compiledand disseminated by theBoL. Data are first releasedon the BoL website and alsopublished on hard copy. Formore details, see the ECBpublication Accessioncountries: balance ofpayments/ internationalinvestment positionstatistical methods,February 2002.

The data are used for thepurposes of supervising CIs.


Lithuania




According to the Law on Statistics, the BoLis responsible for managing official statisticswithin its areas of responsibility. Pursuant toArticle 8 (9) of the Law on the Bank ofLithuania, the BoL collects monetary, bankingand b.o.p. statistics, as well as data onLithuanian financial and related statistics;implements standards on the collection,reporting and dissemination of the saidstatistics; and compiles the b.o.p. of theRepublic of Lithuania.

Responsibility for general state policyregarding methodology and the organisationof statistics lies with SL.

The text of the Law on the Bank of Lithuaniacan be found on the BoL website at www.lb.lt.


The basis for monetary statistics is A Guide toMoney and Banking Statistics in InternationalFinancial Statistics (Draft), IMF, 1984. Themethodological framework reflects conceptsand standards that are broadly consistent withthe Monetary and Financial Statistics Manual, IMF,2000. However, the sectorisation of economicunits does not fully comply with internationalstatistical standards. The differences are shownin Table 3.

In the area of monetary statistics datadissemination, Lithuania applies the IMFSpecial Data Dissemination Standard.

Table 2


Money-creating sector BoL Central bank

Deposit money banks Commercial banks and branches of foreign banks

Other banking Credit unions A credit union is a credit institution organised on a co-institutions operative basis which has been established independently by

natural persons

Other The Central Credit Union of Lithuania. The CCUoL is a creditinstitution organised on a co-operative basis, established bycredit unions and the Government, and functions as a co-operative society.

Money-holding sector Non-bank financial institutions Other financial institutions

Local government A municipality is an administrative unit of the territory of thestate whose residents have a right of self-governmentguaranteed by the state

Non-financial public enterprises Enterprises under the absolute control of governmental units

Private sector Non-financial Non-financial All enterprises other than thoseprivate private sector under the absolute control ofenterprises governmental units. This includes

sole proprietorships.

Private households Natural persons only

Non-profit institutions All non-profit organisations

Money-neutral sector Central government Central government, including counties

Social security funds Social and health insurance funds

Non-resident sector Non-residents Legal entities and natural persons who reside and operate inanother country


Lithuania



At present the economic territory of theRepublic of Lithuania is not defined inlegislation. The concept of economic territoryused for the purpose of money and bankingstatistics includes:

• the geographic territory administered bythe Government of the Republic ofLithuania;

• the national airspace, territorial waters andthe continental shelf lying in internationalwaters over which the Republic ofLithuania enjoys exclusive rights;

• territorial enclaves – i.e. geographicterritories situated in the rest of the worldand used, under international treaties oragreements between states, by generalgovernment agencies of the Republic ofLithuania (embassies and consulates).

The economic territory of the Republic ofLithuania does not include extraterritorialenclaves within Lithuania (i.e. parts of thegeographic territory of the Republic ofLithuania used by general governmentagencies of other countries or byinternational organisations underinternational treaties or agreements betweenstates).

The classification of economic units intoresidents/non-residents is based on theprovisions of the IMF Balance of PaymentsManual (fifth edition). Branches/subsidiariesof Lithuanian banks located abroad areregarded as non-residents, whereas branchesof foreign banks located in Lithuania areregarded as residents for the purposes ofmoney and banking statistics.



Sectors in monetary statistics for Lithuaniaare presented in Table 2.

Borderline cases are as follows:

• sole proprietorships are classified as non-financial private enterprises;

• all non-profit institutions are includedwithout further distinction in one category;

• the non-financial public enterprises sectorincludes only those enterprises that are100 percent owned by government.


A comparison between the sectors in theLithuanian monetary statistics and the ESA95 is provided in Table 3.

Areas where the sectors of the nationaleconomy and the ESA 95 diverge are asfollows:

• sole proprietorships are classified as non-financial private enterprises, although theyshould be classified as householdsaccording to the ESA 95;

• all non-profit institutions are includedwithout further distinction in one category,even though only non-profit institutionsserving households should be separatelyidentified;

• the sectorisation of the public and privatesectors is based on the Law on PublicEnterprises, which establishes that publicsector enterprises are the entities underabsolute control of the governmental units;the non-financial public enterprises sectortherefore includes only those enterprises thatare 100 percent owned by government.


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Table 3

National sector ECB sectorclassification National sectors Sectors in the ESA 95 classification


BoL S121Central bank


Deposit money banks S122Other monetary


S12Financial corporations

(part)

Money-holdingsector

Non-bank financial institutions S123Other financial

intermediaries, exceptinsurance corporations

and pension funds

Money-holdingsector


S125Insurance corporations

and pension funds

Non-financial public enterprises S11Non-financial corporations (part)

Privatesector

S14Households

Private households


Money-neutralsector

n/a

S1311Central government

S13General government

Money-neutralsector


Money-holdingsector

S1313Local government (part)

S1313Local government (part)


Non-residentsector

S211EU

countries

S21European

Union

S2Rest of the world

Non-residentsector


Other bankinginstitutions

Credit unions

Other

Non-financialprivate enterprises

of which: soleproprietorships

Non-profit institutions

S11Non-financial corporations (part)

S12Financial corporations (part)

Central government


Money-holdingsector

Local government

Non-residents

S22Third countries and

internationalorganisations


Lithuania



According to Article 42 of the Law on theBank of Lithuania, “A credit institution shallbe a bank, another legal person or asubdivision of a foreign credit institutionwhose activities on the basis of legal acts areregarded as activities of credit institutions,and which hold a license or permission issuedby the Bank of Lithuania to engage in certainoperations provided for in laws”.

In Lithuania the list of CIs consists ofcommercial banks, branches of foreign banks,credit unions and the Central Credit Unionof Lithuania (CCUoL).

A commercial bank is an enterprise operatingon the basis of share capital, which acceptsdeposits and other repayable funds andextends loans and assumes all the risks andresponsibilities related thereto, and has beenlicensed by the BoL to engage in these and inother activities as specified by Article 25 ofthe Law on Commercial Banks (adopted on21 December 1994, No. I-720; last amendedon 20 June 2002, No. IX-978).

A credit union is a credit institution organisedon a co-operative basis which has beenestablished independently by natural personsand which pools the money of its memberswith the aim of satisfying their business andsocial needs, as provided for in its bylaws, byadvancing loans to members and assumingthe related risks and liabilities, and which hasbeen licensed by the BoL to engage in theseand in other activities as specified by Article7 of the Law on Credit Unions (adopted on21 February 1995, No. I-796; last amendedon 20 June 2002, No. IX-979).

The CCUoL is a credit institution organisedon a co-operative basis, established by creditunions and the Government. It operates onthe basis of share capital and discharges the

functions of supporting the liquidity andrestoring the solvency of credit unions; takesdeposits and other repayable funds; andgrants loans and assumes the risks andresponsibilities related in this context. TheCCUoL has been licensed by the BoL toengage in these and other activities asspecified by Article 5 of the Law on theCentral Credit Union (adopted on 18 May2000, No. VIII-1682).


Not applicable.

2.3.3 Central government units withdeposit liabilities included innational measures of money

Not applicable.


Banks in Lithuania offer their customers allcategories of banking services according tothe activities listed in Article 25 of the Lawon Commercial Banks. Banks have the rightto:

• take deposits and other repayable funds tothe clients’ accounts opened in the bankand to manage these accounts;



Credit institutions 68Commercial banks 10Branches of foreign banks 4Credit unions 53Central credit union 1

Money market funds 0

Other institutions 0

Total 69



Lithuania

• extend and take loans;

• issue financial pledges, guarantees, andother security obligations;

• issue payment documents (cheques, lettersof credit, bills, etc.) and carry outtransactions with them;

• carry out transactions with securities(shares, bonds, etc.);

• carry out operations in foreign currencies;

• buy and sell precious metals;

• issue and manage credit instruments;

• receive valuables from clients for safekeeping, and let safe deposit boxes of thebank vaults to clients for the safekeepingof valuables and documents;

• provide services and consultations onissues concerning banking activities, financeand investment management for clients;and

• carry out other operations established bythe legal acts of the BoL.

The Civil Code of the Republic of Lithuania(adopted on 18 July 2000, No. VIII-1864)distinguishes between demand deposits andtime deposits; however, by agreement partiesmay use other types of deposits. CIs offertheir customers bank accounts, demanddeposits, time deposits, mixed deposits andsavings deposits, and overnight deposits. Themain types of credit product includeoverdrafts, short-term, medium-term andlong-term bank loans, and the purchase oftrade debts (account receivables).



The balance sheet report provides end-of-month stock data on assets and liabilities.The main asset items are as follows: claimson central banks, claims on banks and othercredit and financial institutions, loans to thenon-financial sector, securities and otherassets. The main liability items are as follows:liabilities to central banks, liabilities to banksand other credit and financial institutions,deposits and letters of credit of the non-financial sector, special and lending funds ofinternational organisations and governments,reserves and bank capital.

2.5.2 Breakdown of the main balancesheet items by maturity,counterparty and currency

All data on assets/liabilities are broken downfirst by residency (residents, non-residents)and then by currency (LTL, foreign currency).Interbank and financial institutions’ claims andliabilities are broken down by instrument(demand deposits, time deposits, overnightdeposits, repurchase agreements and loans).Loans extended to the financial and non-financial sectors are broken down bymaturity: short-term (up to one year) andlong-term. Debt securities and equities onthe asset side are broken down by issuer(Treasury bills, government securities with amaturity of over one year, governmentsecurities for the restructuring of banks, banksecurities, financial institutions’ securities andprivate sector securities). The counterpartiesare broken down as presented in Table 2.


Lithuania

2.6 National measure(s) of money:definitions and remarks


Lithuania compiles and disseminates themonetary aggregates M1 and M2.

See Box 1.


It is not possible to distinguish holders ofnegotiable instruments from the dataprovided by CIs.


The counterparts of money in the bankingsurvey are net foreign assets, domestic creditand other net items.

See Box 2.

Box 2Net foreign assets

Foreign assets on a net basis, including the IMF credit to central government.

Domestic credit

Counterparts are broken down into claims on central government and social security funds (on a net basis),

claims on local government, claims on non-financial public enterprises, claims on the private sector, and

claims on non-bank financial institutions.

Other net items

Box 1

Measure M1 (money) includes:

– currency in circulation;

– demand deposits in national currency.

Measure M2 (broad money) includes:

– M1 (money);

– time and savings deposits in national currency;

– deposits in foreign currencies.

The classification of domestic credit is asfollows:

• By sector:

– central government;

– social security funds;

– local government;

– non-financial public enterprises;

– non-financial private enterprises;

– private households;

– non-profit institutions;

– non-bank financial institutions.

• By type:

– Treasury bills;

– government bonds;

– loans and advances;


Lithuania

– discounted bills;

– debt securities;

– equities.

• By maturity:

– short term (up to one year);

– long term.

• By currency:

– in LTL;

– in foreign currency.

2.8 Reserve money

In Lithuania the published monetary baseincludes currency outside the BoL, thereserves of commercial banks in LTL andrequired reserves in foreign currenciesdeposited with the BoL.



Article 54 of the Law on the Bank of Lithuaniastates that “bodies of state authority and

administration, enterprises, institutions andorganisations of the Republic of Lithuaniamust present to the Bank of Lithuania allinformation required for the performance ofits functions.”

The BoL, as one of the institutionsresponsible for managing official statistics,collects, processes, compiles, analyses anddisseminates statistical information.


The reporting population covers alloperational CIs.

See Table 5.


The balance sheet reports of CIs managed bythe CISD of the BoL are the main data sourcefor monetary statistics. These balance sheetreports are provided to the BoL by alloperational commercial banks, branches offoreign banks, credit unions and the CCUoL.The MPD, which is responsible for thecompilation of monetary statistics, has accessto the database of the balance sheet reports.

Banks provide a complete balance sheetreport form (form No. 6001) electronically



all institutions)

National central bank 1 100 32.6


Commercial banks and branches of foreign banks 14 100 67.1

Credit unions and central credit union 54 100 0.3

Money market funds 0 - -

Total 69 - 100



Lithuania

within eight days after the end of thereference month. Credit unions provide acomplete balance sheet report form (formNo. 7051) electronically within seven daysafter the end of the reference quarter. TheCCUoL provides a complete balance sheetreport form (form No. 8051) electronicallywithin eight days after the end of thereference month.

According to the Resolution of the Board ofthe BoL on Key Principles for the Preparationof Credit Institutions Financial Accountingand Accountability (adopted on 15 August1996, No. 230; amended on 5 September2002, No. 114), the financial accounting andreporting of CIs is governed by the following:the Law on Accounting; legislation by theGovernment and the BoL defining financialaccounting and compilation of the reports;and the IAS.

The reporting data are provided in LTL.Balance sheet items denominated in foreigncurrencies are converted into LTL at theofficial exchange rates on the reference date.

The accounting of investments into securitiesis regulated by the Resolution of the Boardof the BoL on General Regulations on theAccounting for Investment in Securities inCredit Institutions (adopted on 20 November1997, No. 253), which lays down theclassification of securities and applicableaccounting rules. CIs are responsible forchoosing their own accounting policy forsecurities.


The accounting balance sheet of the BoL isavailable on a daily basis.

Accounting and recording practices are basedon the ECB recommendations, the IAS andthe BOL’s internal accounting provisions.

The balance sheet items denominated inforeign currencies are converted into LTL at

the official exchange rate on the referencedate. Gold holdings are revalued once amonth on the last working day at the value ofLondon gold price fixing. Marketablesecurities are revalued once a month on thelast working day, using the mid-market pricesprevailing on the secondary markets.



The bulk of monetary statistics are collectedmonthly on an end-of-period basis. Monthlydata for the balance sheets of credit unionsare estimated from the most recent quarterlydata by carrying forward. The balance sheetof the BoL is compiled on a daily basis forinternal use.

2.10.2 Revisions

The data for the latest reporting date for themonetary aggregates published in the MonthlyBulletin of the BoL are provisional andmarked with an asterisk, but are rarelyrevised. In principle, other publishedmonetary statistics are final. In the event ofsubstantial methodological changes, reviseddata are commented on in explanatoryfootnotes.


Breaks in series can be caused by changes inthe reporting population, changes inreporting instructions or changes inmethodology. Changes in the reportingpopulation only occur when a newlyestablished credit institution is included inthe list, when a credit institution underbankruptcy is removed from the list, or inthe case of a merger between banks. Noreclassification adjustments are made for anytypes of break in stock series.


Lithuania

Assets and liabilities denominated in foreigncurrencies are converted into LTL by thereporting institutions at the official exchangerates at the end of the period. Stock data arenot adjusted to eliminate the effects ofchanges in exchange rates.

Flow statistics from the balance sheet of theBoL are calculated as the difference betweenstocks at the end of the current and theprevious months minus reclassifications andminus exchange rate changes. These flowstatistics are only used for internal analysisand are not officially published.

Flow statistics are not calculated from thebalance sheet of the CIs. Some informationabout major reclassifications is gathereddirectly from CIs. End-of-month data fromthe balance sheets of the CIs which havejoined or left the reporting population arealso available for internal use.


Officially published data on monetaryaggregates and its counterparts are notseasonally adjusted. The possibility of officialpublication is being investigated.

2.11 Publication

2.11.1 First release of data (including the medium)

The BoL releases analytical accounts for itsown use (the analytical balance sheet of theBoL) and analytical accounts for the bankingsector (the banking survey) to the media inthe form of a press release (hard copy), andpublishes them at the same time on itswebsite in the form of a time series. Theconsolidated balance sheet of creditinstitutions is also published as a time serieson the BoL website.

Monthly data from the analytical balance sheetof the BoL are disseminated within two weeksof the end of the reference period. Monthlydata from the banking survey aredisseminated within one month of the end ofthe reference period. The precise dates ofdata dissemination are given in the advancerelease calendar on the BoL website and ineach Monthly Bulletin of the BoL for thesubsequent four months.


The banking survey, the monetary aggregates,the analytical balance sheet of the BoL andthe consolidated balance sheet of creditinstitutions are also published in the Monthlyand Quarterly Bulletins of the BoL (both areon hard copy and in printable documentformat on the BoL website at www.lb.lt). TheMonthly and Quarterly Bulletins are publishedwithin one month and two monthsrespectively of the end of the referenceperiod.


The banking survey, the monetary aggregates,the analytical balance sheet of the BoL andthe consolidated balance sheet of creditinstitutions are published by the BoL in theBanking Statistics Yearbook (on hard copyand in printable document format on the BoLwebsite at www.lb.lt).

The banking survey, the analytical balancesheet of the BoL and the consolidated balancesheet of deposit money banks are publishedby SL in the Statistical Yearbook of Lithuania(hard copy).


Lithuania

3 Contacts at the Bank of Lithuania


Monetary Statistics and Analysis Division,Monetary Policy Department,Bank of Lithuania4 Totoriu St, LT-2629 Vilnius, LithuaniaPhone: +370-5-268-01-19Fax: +370-5-268-01-44E-mail: [email protected];[email protected]


Lithuania

Annex 1

Organisation chart of the Bank of Lithuania

Monetary PolicyDepartment

Market Operations

Department

International Relations

Department

Payments SystemsDepartment

Deputy

Chairperson

CashDepartment

Credit Institutions

Supervision Department

General Services

Department

Kaunas Branch

Klaipëda Branch

Deputy

Chairperson

GeneralDivision

Accounting

Department

Information Technologies

Department

Deputy

Chairperson

LegalDivision

Organisation and Personnel

Division

Public Relations

Division

Internal AuditDivision

Security

Department

Chairperson of the Board

7 Members

Board of the Bank of

Lithuania


Lithuania

Malta


Malta


b.o.p. balance of payments (BoP Office = Balance of Payments Office)

CBM Central Bank of Malta

DMBs deposit money banks


GFS government finance statistics


IBIs international banking institutions


MBA Malta Bankers’ Association

MFSA Malta Financial Services Authority

MMFs money market funds

MSE Malta Stock Exchange

MTL Maltese liri

NSO National Statistics Office

OFIs other financial intermediaries

SDRs Special Drawing Rights



Malta




Annex 1 shows the organisational structureof the Central Bank of Malta (CBM). TheGovernor, the Deputy Governor and fiveDeputy General Managers are responsible forthe following divisions within the Bank:Economics Division, Finance and Banking,Financial Markets, Financial Stability andResource Management. The Legal Office fallsunder the direct responsibility of the DeputyGovernor.

Responsibility for policy and generaladministration at the CBM lies with the Boardof Directors, which is composed of theGovernor (as Chairperson), the DeputyGovernor and three other Directors. TheExecutive Management Committee isresponsible for all decisions relating to theCBM’s internal management andadministration. This Committee is composedof the Governor (as Chairperson), theDeputy Governor and the five DeputyGeneral Managers.

See Annex 1.


The main statistical work is carried out bythe Statistics Office within the EconomicResearch Department. Statistical work inconnection with the compilation of balanceof payments (b.o.p.) data is undertaken bythe Data Compilation Section within theBalance of Payments Office (BoP Office),while external debt statistics are collated bythe External Debt Section within the BoPOffice. The Financial Stability Office compilesmacro-prudential and financial soundnessindicators, while the Financial MarketsDivision is responsible for collecting financialdata related to the money and capital markets

and monetary policy operations data.Annexes 2, 3 and 4 show the organisationcharts of the Statistics Office, the BoP Officeand the Financial Stability Office respectively.

The Statistics Office is responsible for datacollection, processing, dissemination andstatistical research related to (a) monetaryand financial statistics, and (b) other generaleconomic statistics. The Monetary andFinancial Statistics Section within the StatisticsOffice is involved in the compilation ofprimary data on money and banking statistics,and thus plays a role in the preparation ofsuch data for the CBM’s Quarterly Reviewand Annual Report, the CBM’s MonetaryPolicy Advisory Council and the Governor’sbriefing committee, and the publication ofthe Monthly Release on Money and BankingStatistics. The Section is also responsible fordisseminating statistical information to otherresearch analysts within the EconomicResearch Department, internationalinstitutions, the National Statistics Office(NSO), selected government departments andthe media. A unit within this Section isresponsible for bringing monetary statisticalmethodology in line with internationalstandards.

The bulk of the monetary information isretrieved from the statutory returns receivedfrom credit institutions in accordance withthe Banking Act of 1994. The international(offshore) banking institutions’ returns arereceived from the Malta Financial ServicesAuthority (MFSA), while the CBM’s ownbalance sheet details are received from theFinancial Control Office.

Once these schedules have beenconsolidated, a banking survey is compiledand the main monetary indicators areretrieved. A thorough verification of thisinformation follows. Subsequently, the mainmonetary indicators are disseminated toother departments within the Bank and toexternal sources. An abridged version of themonetary data is released via the CBM’s


Malta

website and the local press, and is publishedin the CBM’s official publications.

Data on financial institutions are collectedfrom the financial institutions licensed underthe Financial Institutions Act of 1994. TheStatistics Office has also been collaboratingwith the MFSA to collect data in respect ofthe remaining financial institutions as definedin the ESA 95, i.e. including the activities oflocally-based collective investment schemes.Discussions were also held with the MFSA tocommence collating quarterly data fromlocally-based insurance companies. Otherfinancial information, such as selected dataon securities issued, is mainly received fromthe Financial Markets Division of the CBM.Additional financial statistics are receivedfrom the Malta Stock Exchange (MSE).

The Statistics Office’s General EconomicStatistics Section is engaged in the compilationof statistics on the domestic economy,government finance statistics, exchange ratesand selected international indicators. It is alsoresponsible for compiling annual governmentfinance statistics (GFS) for the IMF, a task takenover from the Ministry of Finance. The StatisticsSection relies heavily on data received from theNSO, government departments and local andforeign publications. Much information issubsequently diffused locally and abroad. A unitwithin this Section has been assigned tasks onstatistical methodology related to the domesticeconomy and the compilation of the financialaccounts in collaboration with the NSO.

The Financial Stability Office compiles macro-prudential and financial soundness indicatorsbased on data submitted by credit andfinancial institutions as well as other financialintermediaries. Data are mainly drawn fromthe financial institutions’ balance sheet andprofit and loss accounts, and other macro-economic statistics.

The Financial Markets Division is responsiblefor collecting financial data related to themoney markets, and capital markets andmonetary policy operations data, i.e. openmarket operations, standby facilities and

reserve requirements. Data on the moneyand capital markets are mostly obtained fromthe Malta Stock Exchange.

See Annexes 2, 3 and 4.


The Central Bank of Malta Act (CBM Act) of1967 established the CBM as a corporatebody with a distinct legal personality. TheCBM was formally established with thepromulgation of a Legal Notice in April 1968which brought most sections of the CBM Actinto force. On 10 September 2002 Parliamentapproved amendments to the Central Bankof Malta Act. These amendments gave theCBM greater operational flexibility andconferred additional powers in thecompilation of statistics from reportingagents.

Section 24A of the Act obliges reportingagents as defined in the Act to provide theCBM with such information as the Bank mayconsider necessary to carry out its functionsunder the Act. Section 24B permits the CBMto issue directives providing for the definitionand imposition of its statistical reportingrequirements, establishes the standards forthe transmission and accuracy of statisticalinformation, and specifies the conditionsunder which the right to verify or to carryout the compulsory collection of statisticalinformation may be exercised.




The CBM plays an important part in economicpolicy-making and is a key agent in the Maltesefinancial sector. It has two main objectives:to maintain price stability and to ensure asound financial system, thereby contributingto sustainable economic development.


Malta


The CBM is responsible for the conduct ofmonetary policy in Malta. It also plays animportant part in the formulation of exchangerate policy, which is the joint responsibilityof the Bank and the Government. The CBMis also responsible for promoting a soundfinancial structure, ensuring both the overallstability of the domestic financial system andan orderly capital market in Malta. With effectfrom 1 January 2002, the responsibility forthe supervision and regulation of credit andfinancial institutions was transferred from theCBM to the MFSA.

As banker to the Government and to thedomestic banking system, the CBM providesvarious banking services to governmentdepartments, public sector corporations andcredit and financial institutions. The CBM alsoadvises the Government and publiccorporations on financial matters andprovides a limited range of banking facilitiesto its own staff.



The fulfilment of the CBM’s statutoryfunctions – to conduct its monetary policyeffectively, to promote a sound financialstructure in Malta and to advise theGovernment on economic and financialmatters – implies constant analysis of theeconomic and financial situation both locallyand abroad. These functions are carried outmainly on the basis of the macroeconomicinformation compiled by the Statistics Office.

Apart from the compilation of monetary,financial and general economic statistics asdescribed above, the CBM compiles data onthe monetary base, which consists of

currency in issue and banks’ deposits withthe CBM, including required reserves.Moreover, according to the CBM Act theCBM may require banks carrying on thebusiness of banking to maintain reservedeposits with the Bank. At present, reservedeposit requirements are equivalent to 4% ofthe average of the opening and closing depositliabilities of the reference month. Informationon the banks’ deposit liabilities is collectedby the Financial Stability Office, while theFinancial and Banking Division and theFinancial Markets Division administer thebanks’ reserve deposit accounts.

In the area of financial stability, the FinancialStability Office compiles data and carries outresearch and analysis on the overall stability ofthe domestic financial system, with particularemphasis on financial soundness indicators.

The BoP Data Compilation Section compilesmonthly b.o.p. statistics on a cash basis settledthrough the local banking system. It alsocollaborates with the NSO to compile thequarterly and annual accrual b.o.p. and theinternational investment position. TheExternal Debt Section within the BoP Officecompiles the external position of the privateand public sectors.


The Malta Statistics Authority Act adopted inOctober 2000 makes provision for theestablishment of a Statistics Authority toregulate the collection, compilation andpublishing of official statistics. The StatisticsAuthority supervises the NSO. The latter isresponsible for the collection, compilation,extraction and release of official statisticsrelating to demographic, social, environmentaland economic conditions and generalactivities. It is thus responsible for compilingand publishing the national accounts andother macroeconomic indicators.


Malta

The Statistics Office relies heavily on datareceived from the NSO and variousgovernment departments such as theTreasury and the Ministry of Finance. TheMFSA and the MSE are other importantpartners, as they provide the Statistics Officewith substantial statistical information. TheGeneral Economic Statistics Section relies onthe voluntary collaboration of other majorpublic sector authorities such as the MaltaTourism Authority and the Employment andTraining Corporation for the provision oftourism data and labour market data,respectively. Data are received by theExternal Debt Section from non-financialcompanies for the compilation of externaldebt statistics.

The CBM and the NSO co-operate incompiling the b.o.p. While the NSO isresponsible for compiling the b.o.p. on anaccruals basis at quarterly and annualintervals, the CBM’s task is to compile thecash-based b.o.p. on a monthly basis. TheNSO also compiles b.o.p. data on a regionalbasis. The compilation of b.o.p. data is in linewith the fifth edition of the IMF’s BoP manual.

Through the provisions of the MFSA Act asamended in 2002, with effect from 1 January2001 the MFSA became responsible forprudential supervision. For this purpose itcompiles monthly and quarterly information

(the latter in more detail) according to theschedules received under the Banking andFinancial Institutions Acts. Data gatheredcomprise information on own funds, largeexposures, solvency ratios, capital adequacy,liquidity requirements and other statutoryinformation on various on-balance-sheet andoff-balance-sheet items. The compilation ofsuch information is generally in line with thestandards set in the Basel Accord and the EUDirectives.

The MFSA is also responsible for advising theGovernment on financial services and relatedmatters, and for supervising insurance andinvestment services. This authority plays animportant role in data compilation, since itprovides the Statistics Office of the CBM withinformation pertaining to the financial sector.

The Statistics Office has commenced workon the compilation of Malta’s financialaccounts on an annual basis in conjunctionwith the NSO. The first results are expectedin early 2003 and will be submitted toEurostat.


See Table 1.


Malta

Table 1



and counterparts

Collected data

Collecting agents

Description

Interest rates on:

• Deposits (monthly, as per statutory data receivedfrom credit institutions).

• Loans (monthly, as per statutory data received fromcredit institutions).

• Official interest rates (received on a real-time basis).

• Money and capital market yields (weekly).

CBM CBM Malta Stock Exchange

CBM

Users CBM CBM CBM

See further details of the banks’stock positions in Section 2.9.3.

Monthly/quarterly information asper statutory financialinformation received from creditinstitutions no later than 15 daysfollowing the reference period.The statements detail thefinancial position of theseinstitutions in a balance sheet,profit and loss accounts and theappropriation account. Inaddition, a series of additionaldescriptive tables contain moredetailed information on selectedbalance sheet items such asinvestment securities, trading andother investments, loans andadvances and deposit liabilities.

CBM balance sheet (monthly)within one week of the referencemonth. The main items on theassets side of the balance sheetcomprise total external assets,IMF-related assets, holdings ofsecurities, tangible fixed andother remaining assets. The mainitems on the liabilities side of thebalance sheet include banknotesand coins in circulation, IMF-related liabilities, deposits of thebanks, government and others,other liabilities, capital andreserves.

Treasury bills (weekly/monthly).

Government stocks(monthly, on request).

Listed corporate bondsand equity (quarterly, onrequest).

Deposits (various maturities): weighted average interestrate; minimum rate; maximum rate.

Loans (various maturities): weighted average interestrate; minimum rate; maximum rate.

Rates on the discount, overnight and repo facilities.

Interbank offered rates; yields on Treasury bills andgovernment bonds.

Treasury bills (variousmaturities).

Government stocks(various maturities).

Listed corporate bondsand equities (variousmaturities).


Malta

Table 1 (continued)


Collected data

Collecting agents

Users

Description In Excel format on floppydisk via courier, messengeror by post.

A signed hard copy.

Monthly details on depositliabilities constituting thereserve base on separateforms (by no later than tendays following the referenceperiod).

The CBM assists the NSOin compiling financialaccounts. The NSO isresponsible for thecompilation of suchaccounts.

Monthly b.o.p. (on a cashbasis) from banks withinfour weeks of the referenceperiod.

Joint NSO/CBMcompilation of quarterlyb.o.p. (on accrual basis)within one quarter.

Quarterly/annual externalposition of selected sectorswithin one quarter/year.

Financial Stability Office n.a. CBM (monthly), CBM andthe NSO, jointly.

MFSA

Financial Control Office,Statistics Office, FinancialMarkets Division (CBM).

n.a. CBM, NSO, localgovernment agencies andforeign institutions.

Financial Stability Office(CBM)

Monthly data on specificdeposit liabilities.

Information received bypost or by messenger.

n.a. Monthly data on Excelspreadsheets as e-mailattachments and transferredto Aremos. Quarterly datathrough survey data (storedin Paradox).

Assets acquired insatisfaction of debt,investments in other banks,companies or groups ofconnected persons,contingent liabilities,pledged assets, past due anddoubtful loans andadvances, classification ofthe lending portfolio, limitexcesses, rescheduled loans,loans to directors and staffmembers, shareholdersowning more than 5% ofshares, detailed profit andloss accounts, interest raterisk exposure and “shockscenario”, an overall foreigncurrency open positionexposure, classified also bycurrency (as per statutoryfinancial information), otherdata collected during on-siteinspections.




The CBM is authorised to collect data frombanks under the CBM Act of 1967. Section24B of the amendments to this Act stipulatesthat the CBM may inter alia issue directivesproviding for the definition and imposition ofits statistical reporting requirements. TheBank is also authorised to verify the accuracyand quality of the statistical informationsubmitted. When it deems it necessary in

carrying out its functions under the Act, theBank shall prepare and publish statements,consolidating and/or aggregating statisticalinformation.

All credit and financial institutions in Maltaare required to submit statutory statementson their financial position to the CBM.Monetary statistics are taken from thestatutory Banking Directive No. 6. The CBMAct can be accessed via a link on the CBM’swebsite to the “Laws of Malta” section of theMinistry of Justice .


Malta


The methodology underlying the compilationof Maltese monetary and banking statistics isgenerally consistent with internationallyagreed concepts, definitions andclassifications, as published in the IMF’s “AGuide to Money and Banking Statistics inInternational Financial Statistics” (1984).Details of the applied concepts andmethodologies can be found in Section 2.9.3.In mid-2003, these standards will beharmonised with the ESA 95 and the latestECB standards in the field of money andbanking statistics.


In mid-2000 the CBM decided to adopt astrategy to revise its bank returns, conceptsand methodologies so as to conform to ECBRegulations, the ESA 95 and the IMF’sMonetary and Financial Statistics Manual of2000. This strategy specified that the periodfrom September 2000 to March 2001 wouldbe dedicated to the training of new staff, tomethodological research and to theformulation of a new draft summary balancesheet. Subsequently, the summary balancesheet will be introduced to the local financialsector by a technical committee createdspecifically for this task, comprisingrepresentatives of the financial sector, theMalta Banks’ Association, the MFSA, the NSOand the MSE. The creation, presentation andimplementation of the complete set of newschedules will be take place between mid-2001 and mid-2003.


The domestic territory refers to thegeographical territory administered by theGovernment of Malta, which comprises theMaltese Islands.

Money and banking data are based on theclassification of transactions by the residence

of the transactors. The residence criterion isbased on the transactor’s “centre ofeconomic interest” within Malta. Thus, aninstitutional unit is defined as having a centreof economic interest in Malta when thereexists some location within the economicterritory of Malta on, or from which, the unitengages and intends to continue engaging,either indefinitely or over a finite butextended period of time, in economicactivities and transactions on a significantscale. A guideline of one year or more isapplied flexibly. Domestic branches of foreignbanks are thus deemed to be residents of thecountry, while foreign branches of domesticbanks are deemed to be non-residents.Diplomatic missions, embassies, consulates,military establishments and other foreigngovernment entities located in Malta aretreated as non-resident units.

There is currently only one international(offshore) bank operating in Malta. Offshorebanks are considered to have a centre ofeconomic interest in Malta and are thereforedeemed to be resident units of Malta. Otheroffshore non-banking institutions are treatedas resident or non-resident units, dependingon whether they are considered to have acentre of economic interest in Malta. In legalterms, all licensed offshore business maycontinue in operation until 2004 at the latest.



As shown in Table 2, the Maltese economy isbroken down, for statistical and economicanalysis purposes, into five sectors accordingto the primary activity of those sectors.The sectors comprise (a) banks; (b) government;(c) public (non-banking) corporations/authorities; (d) private corporate (non-banking); and (e) the personal (households)sector. The non-resident sector is classifiedseparately.


Malta

For prudential supervision purposes, the bankingand financial sectors are further broken downinto three main sectors. These comprise (a)credit institutions licensed under the BankingAct, (b) financial institutions licensed under theFinancial Institutions Act (mainly exchangebureaus, but excluding collective investmentinstitutions and insurance companies), and (c)international (offshore) banking institutionslicensed under the MFSA Act (Cap. 330).

2.2.2.2 Comparison between the sectors of thenational economy and the ESA 95.

The comparison between the sectors isillustrated in Table 3.


Money-creating sector CBM The CBM, which was set up by the CBM Act in 1967, is assigned theresponsibilities normally assigned to the monetary authority of acountry.

Deposit money banks (DMBs) DMBs are banks that offer liabilities in the form of deposits payable ondemand, transferable by cheque or that can otherwise be used formaking payments to non-bank enterprises and households.

International banking institutions IBIs are banks that offer international banking facilities primarily tonon-residents and accept deposits from non-residents. Since suchbanking institutions are permitted to offer demand deposits to theircustomers, their assets and liabilities are consolidated with those of theDMBs in order to derive the statistical data for the Banking Survey.

Money-holding sector Public (non-financial) corporations Public (non-financial) corporations and authorities include all non-bankpublic sector corporations/authorities that are subject to control by thegovernment, whereby “control” is defined as the ability to determinegeneral corporate policy. In some cases, these corporations andauthorities are specifically established by law. In other cases, control isestablished by applying the 50%+1 shareholding criterion.

Private corporate The private corporate (non-banking) sector consists of those resident(non-banking) sector non-bank companies under private ownership or control that are

principally engaged in the production of market goods and non-bankservices. These entities are collectively owned by shareholders thathave the authority to appoint directors responsible for generalmanagement, and may be a source of profit or other financial gain totheir owners. The main difference from the related ESA 95 definition isthat this category incorporates collective investment institutions,insurance companies and exchange bureaus, as well as non-profitinstitutions.

Household sector The household sector includes resident individuals or groups ofindividuals.

Money-neutral sector Central government Central government comprises the central government and the localcouncils. The central government units covered by the general budgetinclude the House of Representatives, the National Audit Office, theOffice of the Ombudsman, the President’s Office, the Prime Minister’sOffice and 13 ministries. For statistical purposes, local councils are notconsidered to be separate institutional units but as part of centralgovernment, as they are not able to raise funds or incur liabilities byborrowing on their own account. The main difference from the ESA 95-recommended general government sector (S13) is that the currentgovernment sector does not include the central government unitscovered by individual budgets. The latter are included in the publiccorporations/authorities sector.

Non-resident sector All other units of an economy that do not meet the above criteria areconsidered to be non-resident units.

Table 2


Malta

S22


Table 3




Central Bank of Malta (CBM) S121

Central bank


Deposit money banks (DMBs)

International banking institutions (IBIs)

S122


S12


Money-holdingsector

Classified as public (non-financial) or privatecorporate (non-banking) sector. OFIs are includedin this category.

S123


and pension funds

Money-holdingsector

S124


S125


Money-neutralsector



General government

Money-neutralsector

S1312

State/regionalgovernment

Money-holdingsector

S1313

Local government

S1314


Non-residentsector 1)

S211

EUcountries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212


n.a.

n.a.

n.a.

Household sector

n.a.

S11


S14

Households

S15


n.a.

n.a.

n.a.

1) The non-resident sector is not classified. However, loans and deposits are classified in euro, other European Union currencies and in other majorinternational currencies.


Malta



As indicated previously, the credit and financialinstitution definitions are not currently in usefor the compilation of money and bankingstatistics. However, since the Banking Act of1994 adopted the concept of a credit institutionas stipulated in the First and SecondCo-ordination Directives of the EuropeanUnion, such definitions will eventually be usedas the basis for classifying local banks asmonetary financial institutions according toCommunity law. Thus, credit institutions fallingunder the Banking Act are granted generalauthorisation, which covers all the activities ofthe Second Co-ordination Directive. Theprincipal activity of credit institutions is carryingout the “business of banking” in or from Malta.In turn, the business of banking is defined in theBanking Act as the receipt of deposits of moneyor other repayable funds from the public andthe reinvesting or lending of such funds.

The international offshore banking institutionsoperating in the country are licensed andsupervised by the MFSA under the MFSA Act(Cap. 330). In December 2002, there wasone registered offshore banking institution.In 1994, matters relating to the establishmentand supervision of international or offshorebanks became the responsibility of the MFSAas appointed in terms of the MFSA Act of1994. Consequently, all offshore companiesare obliged to convert to onshore companiesby 2004.

The MFSA also supervises insurancecompanies and investment licence holders.The latter include local and foreign-basedcollective investment schemes, mutual fundsand certain investment partnerships andinvestment companies. At the end ofDecember 2002, there were 58 licensedMalta-based and 311 overseas-basedcollective investment schemes, including sub-funds.

Unlike credit institutions, financial institutionsare precluded from taking deposits or otherrepayable instruments from the public to fundtheir activities, although they can carry outvarious other kinds of banking activities. Theyare regulated by the Financial Institutions Act of1994 and are not considered part of the money-creating sector. The activities of the financialinstitutions include lending, financial leasing, theprovision of venture capital, foreign exchangedealing and underwriting. The majority of theseinstitutions are exchange bureaus involved inadministering means of payment and trading inforeign exchange.

There is one representative office operatingin Malta. The business of representativeoffices is confined solely to liaison activitiesand does not include engaging in financialactivities.


Four locally-based money market funds(MMFs) were operating in the country as atDecember 2002. The accounts of such unitsare not included in the process of compilingmoney and banking statistics.


Central government units do not issueliabilities that are included in measures ofmoney.



Credit institutions 15Credit institutions 14International (offshore) banking 1institutions licensed under the MFSA Act

Other monetary institutions2 4

Total 20


2) Comprising MMFs.


Malta


The deposit business of banks includes abroad range of interest-bearing and non-interest-bearing deposit services, such ascurrent (demand) accounts with chequefacilities, savings deposits, term and foreigncurrency deposits. Savings deposits bearinterest and, technically speaking, can only bewithdrawn after due notice has been given.Banks also provide foreign exchange andmoney transmission services including theexecution of payments by means of cheques,electronic transfers or direct credits.

Credit products offered by banks include alltypes of credit and/or mortgage loans tohouseholds, industry and other banks,whereby the maturity, interest repayment andinterest schedules vary according to thecustomer. Banks may also place funds inshort-term and long-term securities, equityshares and participations in associated orsubsidiary companies.

Other products offered by the bankscomprise financial leasing, the issuing ofguarantees and commitments, trading fortheir own account or for the account ofcustomers in money market instruments,operations in futures and options, interestrate instruments and transferable instrumentsand participation in share issues.



The main items on the assets side of theCBM’s balance sheet comprise (i) totalexternal assets (including cash and bankbalances, gold, placements with banks,securities and other foreign currency assets),(ii) IMF-related assets, (iii) holdings ofsecurities (including Treasury bills and otherdomestic debt securities), (iv) tangible fixedassets and (v) remaining other assets

(including accrued interest receivable). Themain items on the liabilities side of the balancesheet include (i) banknotes and coins incirculation, (ii) IMF-related liabilities, (iii)deposits of banks, government and others,(iv) other liabilities (including accrued interestpayable), and (v) capital and reserves.

The main items on the assets side of the restof the banking sector’s balance sheetscomprise (i) cash, uncleared effects and otherbalances, (ii) investment securities, (iii)repurchase agreements, (iv) tradinginvestments, (v) loans and advances, (vi)tangible fixed assets, (vii) investments in otherbanks, companies or groups of persons, (viii)intangible assets, and (ix) other assets. Onthe liabilities side, the principal componentsinclude (i) deposit liabilities, (ii) securities soldunder agreement to repurchase, (iii) CBMborrowings, (iv) other borrowed money, (v)secured indebtedness, (vi) subordinated loancapital, (vii) notes and debentures, (viii)redeemable preference shares, and (ix) otherliabilities. Items in the shareholders’ fundssection comprise: (i) perpetual preferenceshares, (ii) ordinary shares, (iii) sharepremium accounts, (iv) reserves and (v) profitand loss accounts.


The CBM’s classification of the main balancesheet items by instrument/maturity,counterparty and currency is as follows:

(a) Placements with banks are subdivided byremaining maturity in the followingmanner: (i) up to one month, (ii) overone month up to three months, and (iii)over three months up to one year.

(b) Investment securities are categorised byremaining maturity into: (i) up to threemonths, (ii) three months up to one year,(iii) over one year up to five years, and(iv) over five years.


Malta

(c) Holdings of Treasury bills are classifiedby remaining maturity as: (i) up to onemonth, (ii) over one month up to threemonths, and (iii) over three months upto one year.

(d) Holdings of domestic debt securities arebroken down by remaining maturity into:(i) up to one year, (ii) over one year butunder five years, and (iii) over five years.

(e) Government and other deposits arecategorised by Maltese lira or foreigncurrency. Furthermore, these areclassified into (i) those repayable ondemand and (ii) those repayable withinthree months.

(f) The CBM’s foreign currency holdings aregrouped by main currency and byresidency. These instruments areclassified in detail and a monthly reportis submitted to the IMF.

On the liabilities side of the balance sheet,deposits are categorised into those placed bybanks, government and others. A similarclassification has been implemented tocategorise accrued interest payable. On theassets side, domestic securities and accruedincome are also categorised in this manner.Foreign currency reserves are classified byresidents of issuing currencies.



The monetary aggregates currently publishedby the CBM are Ml and M3. M2 figures arecompiled and forwarded to Eurostat, but theyare not currently published. Data on theMonetary Base (M0) are also compiled.

Box 1

Monetary Base (M0) comprises:

– currency in issue plus

– banks’ deposits with the CBM.

Note that term deposits are not included in the definition of M0.

The money supply Ml, or narrow money, comprises

– currency in circulation (banknotes and coins outside the banking sector), plus

– transferable deposits (i.e. demand deposits) of the non-bank domestic sectors (demand deposits exclude

deposits from the Maltese Government, balances belonging to non-residents, as well as uncleared effects

drawn on the CBM and the DMBs).

The money supply M2 comprises

– M1 plus

– domestic savings and time deposits with an original maturity of up to two years.

Note that M2 is not used for monetary policy purposes, but it is compiled solely for statistical comparison

purposes.

The money supply M3, or broad money, comprises

– M1 plus

– savings and time deposits belonging to residents (savings and time deposits are netted of government

deposits, deposits belonging to non-residents and interbank balances).

Note that M3 is the broadest measure of money in use.


Malta


Details of banknotes and coins issued by andpaid into the CBM are published in the CBM’sAnnual Report. At present, the banks do notissue other types of freely transferable andnegotiable instruments3. However, they domake use of bills payable instruments. Forstatistical reporting purposes, such bills areadded to cash and uncleared effects, the latterbeing deducted from demand deposits. Reposand term deposits (instruments that are usedin open market operations) are not freelytransferable since these are transactionsconducted specifically between the CBM andindividual banks.


See Section 2.9.3 for the classification ofcredit to domestic residents by sector, typeand maturity.

2.8 Reserve money

The official measure of the CBM’s monetaryliabilities is the Monetary Base (M0). M0comprises currency in issue and banks’deposits with the CBM.



The CBM is authorised to collect data frombanks under Section 24B of the amendmentsto the CBM Act of 1967. The Bank also hasthe right to verify the accuracy and quality ofthe statistical information submitted and tocarry out compulsory data collection. TheMinister of Finance may issue regulationsempowering the Bank to impose sanctionsin case of non-compliance with legalrequirements.

3) For example, on one occasion a bank issued a marginal amountof certificates of deposits to depositors as pledges against loans.

The MFSA is authorised to collect informationfrom the international (offshore) bankinginstitutions and Money Market Funds. Section38A (1) of the amendments to the CBM Actstates that the Bank may require thecompetent authority to pass to it anyinformation in the possession of, or accessibleto, the competent authority which isnecessary for the Bank in the discharge of itsduties under the Act or any other Act.


For the purposes of consolidating money andbanking statistics, the CBM collects monthlyand quarterly information from all institutionsclassified as DMBs and IBIs. With regards tothe other financial institutions, apart fromdata on OFIs registered under the MFSA Actof 1994, the CBM also receives monthlyinformation on collective investmentinstitutions from the MFSA. Plans are at handto commence receiving quarterly data oninsurance companies from the MFSA,primarily for financial accounts purposes. TheCBM collects monthly data from branches,agencies and offices in Malta of those creditinstitutions that are not incorporated inMalta. Although there are currently no creditinstitutions incorporated in Malta that havebranches overseas, if such a case were toexist, then these overseas branches wouldalso be obliged to submit regular informationto the CBM.


Money and banking statistics are extractedfrom prudential supervisory reporting formsthat are submitted to the CBM in accordancewith Section 19 (4) of the Banking andFinancial Institutions Acts of 1994. Branches,


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Box 2

“Total credit to the economy”, or total domestic credit includes:

– net claims on the government (includes credit to government from the monetary authorities, DMBs and

OBIs in the form of Treasury bills and government stock holdings, minus government deposit liabilities);

– claims on the private and public non-financial corporations (includes loans and advances to residents, bills

discounted and investments in other securities in Malta by the DMBs, IBIs and OBIs, excluding interbank

transactions); and

– government deposits (total government deposits held with the CBM and the banks. These include deposit

liabilities belonging to the local councils).

“Net foreign assets” is the difference between foreign assets and foreign liabilities belonging to the monetary

authorities and the rest of the banking system, including:

Foreign assets of the monetary authorities:

– gold holdings;

– the IMF’s reserve tranche position (less fund holdings of national currency); and

– Special Drawing Rights (SDRs) and convertible exchange and other foreign assets. At present, the CBM

does not report any foreign liabilities.

Foreign assets of the rest of the banking system:

– holdings of foreign currency;

– claims on other foreign banks;

– uncleared effects drawn on banks abroad;

– money at call abroad;

– holdings of foreign government treasury bills;

– government and other securities;

– bills discounted;

– loans and advances to non-residents; and

– foreign securities purchased under agreements to resell and other foreign assets.

“Net foreign assets” excludes

Foreign liabilities:

– non-resident deposits;

– foreign securities sold under agreement to repurchase; and

– foreign subordinated loan capital and deposits of foreign banks.

“Other items (net)” comprises those instruments that are regarded as incidental to the function of the

institutions as financial transactors, such as:

– capital accounts (including preference and ordinary shares, capital, foreign exchange valuation and

undistributed profits and losses and provisions);

– net balances within a financial sub-sector (for the purposes of consolidation); and

– fixed and other unclassified assets or liabilities.


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agencies and offices in Malta of creditinstitutions that are not incorporated in Maltaare also obliged to fill in the requested forms.All credit institutions (licensed under theBanking Act of 1994), financial institutions(licensed under the Financial Institutions Actof 1994) and representative offices andoffshore banking institutions (licensed underthe MFSA Act) are obliged to submit periodicstatements to the respective authorities. Theabove-mentioned institutions provide fullbalance sheets and details on the maincomponents.

The monthly reporting statements have to besubmitted to the CBM no later than the 15thcalendar day following the reference period.The same deadline applies to quarterlystatements. The international offshorebanking institutions’ returns are submitted tothe MFSA on a monthly basis within onemonth of the reference period, while allquarterly returns are submitted within onemonth of the quarter–end.

The monthly statements for credit institutionsand financial institutions are incorporated inBanking Directive BD06 of the Banking Actof 1994 and FID02 of the Financial InstitutionsAct of 1994 respectively. The statementsdetail the financial position of theseinstitutions in a balance sheet, in profit andloss accounts and in the appropriationaccount. In addition, a series of additionaldescriptive tables contain more detailed



all institutions)

National central bank 1 100 12

Credit institutions 15 100 88


International (offshore) banking institutions 1 100 4licensed under the MFSA Act


Total 16 - 100


information on selected balance sheet items,such as investment securities, trading andother investments, loans and advances anddeposit liabilities (see below).

The banking returns submitted to the MFSAinclude a balance sheet, with additional detailson loans and advances classified by size andinterest rate, and deposits by ownership andmaturity. Additional quarterly informationcomprises details on core and supplementarycapital, the profit and loss account and detailson provisions for bad and doubtful debts.Operations in deposits and loans are classifiedby principal currency. This categorisationincludes details on operations in euro, otherEuropean Union currencies and in othermajor international currencies. Investmentsecurities are categorised by principal localor foreign issuer.

Credit institutions are expected to prepare allreturns on an accruals basis and in accordancewith the requirements of the InternationalAccounting Standards (IAS). However, forstatistical purposes, net foreign assets are alsoshown on a cash basis. Money and banking datacollected are stock data, i.e. data on outstandingbalances at the end of the month or quarter.Assets and liabilities are reported at book value.In the case of investment securities, the bookvalue includes the amortisation of premia andthe accretion of discounts on securitiespurchased at other than par or face value.Investment securities are also reported at


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market value. The market value is calculated atthe middle market price as at the date of thereport. Trading investments are valued at thelower of cost or market value.

The monthly/quarterly returns are submittedas Excel worksheets on a floppy disk, eitherby courier, messenger or post. A hard copyprintout of the information is also providedto the CBM, duly endorsed by the institutions’authorised signatories.


Figures for the monetary authorities areobtained from the balance sheet of the CBM.The balance sheet is compiled by the FinancialControl Office of the CBM and provided tothe Statistics Office on a monthly basis, onceit has been approved by the CBM’s Board ofDirectors. The Statistics Office receives suchinformation electronically.

The financial statements of the CBM areprepared in such a way as to give a true andfair view of the state of affairs of the CBM atthe end of each financial year (i.e. ending on31 December). This financial statement isprepared in compliance with the IAS issuedby the International Accounting StandardsCommittee in so far as these are appropriateto a central bank and applicable in terms ofthe CBM Act of 1967.



Data provided by the reporting agents areend-of-month positions. Asset and liabilityitems which are denominated in foreigncurrencies are converted into Maltese liri(MTL) at the middle exchange rate valid atthe end of the reporting period. End-of-month exchange rates of the Maltese lira

represent the closing mid-point rates of thelast working day of the month, where a mid-point rate is calculated as the arithmetic meanof the buying and selling rates.

2.10.2 Revisions

Following the publication of provisionalmonthly statistics, data can be amended.Statistics are theoretically final once they havebeen published in the Quarterly Review. If,however, reporting errors are discovered ata later stage, they are subsequently corrected.In principle, the latest published data areconsidered to be the most up-to-dateinformation available and only substantialrevisions would merit highlighting in afootnote.

Major breaks in series generally occur due tomethodological changes, changes in reportingregulations or changes in the reportingpopulation (e.g. bank mergers). Minor breaksoccur frequently as a result of the evolutionof the reporting population. Explanations forsuch breaks are usually given in the footnotesor are indicated specifically in a note in theQuarterly Review, depending on the scaleand effect of the revision. When data areavailable, series are amended as far back aspossible. In the case of a recalculation of theseries not being feasible, or of a seriesexpiring as a result of conceptual changes,the new series are published from the date ofthe break together with data for the oldseries for a number of years, if possible.

Guidelines on such policies are either includedin the Notes to Banking Directive No. 6 orissued specifically by means of a Notice. Assetsheld as trading securities, for instance, are valuedat the lower of cost or market value. Investmentsecurities are reported at book and marketvalue. Moreover, banks must adhere to aconsistent policy of revaluing their fixed assets.

With regard to the CBM’s balance sheet,foreign currency assets and liabilities are


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reported using closing rates of exchangeagainst the Maltese lira. Exchange differencesarising from such conversions are recognisedas income or expense in the period in whichthey arise.


Flows statistics are currently not compiled.They will be compiled on a monthly basiscommencing mid-2003.


Published data are not seasonally adjusted.Occasionally, however, deseasonalised dataare used in the graphical illustration of certainmonetary statistics. Such data are seasonallyadjusted using the Census-X11 calculationmethod.

2.11 Publications


Monetary statistics are first released to thepublic within one month on the CBM’swebsite. Subsequently, such data are releasedin the local press within 5-6 weeks of thereference month in a monthly publicationentitled “Release of Monetary Aggregates andtheir Determinants”. Information releasedincludes the provisional monetary aggregates,their determinants and the main items in eachcategory. The Governor’s Office (within theCBM) submits this information electronicallyas a Word document to a private publicityfirm, which is responsible for forwarding it tothe local media.


Weekly money and banking statistics are notreleased by the CBM. Apart from the Releasementioned in Section 2.11.1, the CBM doesnot release other monthly publications onmoney and banking data.


The CBM publishes a range of monetary andfinancial statistics in its Quarterly Review.The Statistical Tables in the Review provideextensive information on Maltese money andbanking statistics, together with a briefmethodological note on the compilation ofsuch information. The “Statistical Tables”section comprises five parts, namely Moneyand Banking, Government Finance, PublicDebt, External Transactions, and RealEconomy Indicators. The Quarterly Reviewis released within three to four months ofthe reference quarter. It is submitted by postto interested parties and also placed on theCBM’s website.

Although the CBM’s Annual Report does notinclude an annex with statistical information,a number of tables containing statisticalinformation are shown. In accordance withthe CBM Act of 1967, a copy of the annualaccounts, as certified by the auditors, and areport on the operations during that yearhave to be transmitted to the Minister ofFinance no later than three months after theclose of each financial year. By the time ofthe first sitting of the House ofRepresentatives after 7 April, the Minister ofFinance should have brought a copy of theseaccounts before the House ofRepresentatives. A copy of these accounts isalso published in the Government Gazette.The CBM additionally provides copies of theAnnual Report by post to interested parties,and places a copy on its website.


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3 Contacts at the Central Bank of Malta


Statistics OfficeEconomic Research DepartmentCentral Bank of MaltaCastille PlaceValletta CMR01MaltaPhone: (356) 2550 2000Fax: (356) 2550 2500


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Organisation chart of the Central Bank of Malta (CBM)

Annex 1

Economic Analysis Office

Economic Research Research Office

Dept. Statistics Office

Deputy Governor Deputy General Manager Balance of Payments Office

Economics Division

Library & External Library

Relations Dept. External Relations Office

Deputy General Manager Banking & Issues Retail Banking Office

Finance and Banking Dept. Payment Systems Office

Currency Issues Office

Financial Control

Dept. Finance Office

Domestic Markets Open Market Operations Office

Deputy General Manager Dept. Money and Capital Markets Office

Financial Markets Division Government Debt Analysis Office

Reserve Management Investments and Reserves Office

Dept. Middle Office

Correspondent Banking Office

Financial Stability Office

Deputy General Manager Financial Stability Risk Assessment Office

Financial Stability Division Dept. Audit Office

Human Resources Office

Resources Dept. Administrative Office

Deputy General Manager Security

Legal Office Resource Management Division

Information Systems IT Services Office

Dept. Software Development

Records Management

Services Office

Governor


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Organisation chart of the Statistics Section(within the Economics Department)

Annex 2

Research

Office Office

Senior Manager

Economic Research Department

Monetary and Financial

Manager

General Economic

Statistics OfficeEconomic Analysis

Statistics SectionStatistics Section

Statistical

Methodology

Data

Compilation

Statistical

MethodologyData Compilation


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Organisation chart of the Balance of Payments Office

Organisation chart of the Financial Stability Office

Financial Stability Office

Domestic

Finance Section

Financial Services

and Regulatory

Policy Section

International

Transactions

Section

Financial

Intermediaries

Section

Data Compilation Office

Market

Infrastructure

Section

Annex 3

Annex 4

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Malta

Poland


Poland


BFG Banking Guarantee Fund

BH Bank Handlowy w Warszawie S.A.


BISS Bank Statistical Information System


CRBS Central Register of Treasury Bills


GINB General Inspectorate for Banking Supervision

GUS Central Statistical Office

IBRD International Bank for Reconstruction and Development



KNB Commission for Banking Supervision

MF Ministry of Finance

MFIs monetary financial institutions

NBP National Bank of Poland


PLN Polish zloty


SKOKs co-operative savings and credit unions

USD US dollar

EUR euro


Poland




See Annex 1.

The basic decision-making bodies ofNarodowy Bank Polski – the National Bankof Poland (NBP) – are the President, theMonetary Policy Council and the ManagementBoard.

The President is appointed by Parliament fora term of six years. The President chairs theMonetary Policy Council, the ManagementBoard and the Commission for BankingSupervision.

The Monetary Policy Council is a bodyestablished under the Act on the NationalBank of Poland (Act on the NBP) of 29 August1997. It is composed of nine membersappointed in equal numbers by the Presidentof Poland and the two chambers of Parliamentfor a term of six years. The Council isresponsible for drawing up the annualmonetary policy programme and the basicprinciples for implementing that programme.The Council also sets the official base interestrates, determines the principles to be appliedto open market operations, and sets thereserve ratio. Furthermore, it approves theNBP’s financial plan and its report ofoperations.

The Management Board manages the activitiesof the NBP. Its primary responsibilitiesinvolve implementing the resolutions of theCouncil, adopting the NBP’s plan ofoperations and financial plan, and performingother duties with respect to exchange ratepolicies.


See Annex 2.

The responsibilities of the StatisticsDepartment involve collecting, processing anddisseminating statistical information andreviewing it on an ongoing basis in relation tomonetary issues, the balance of payments(b.o.p.), the international investment position(i.i.p.) and corporate finances in the Polishnon-financial sector. The Departmentcomprises nine divisions/sections and threeindependent positions (see Annex 2). Thedivisions/sections are as follows:

1) the Banks’ Balance Sheet Division isresponsible for the collection, revision,control and analysis of the monthly andquarterly information submitted by banksand the NBP, as well as for themaintenance, updating and modification ofthe database;

2) the Analysis Division deals with the analysisof monetary data based on informationavailable internally and externally, thepreparation of analytical materials forinternal and external users, andmethodological work related to monetarystatistics;

3) the Preliminary Information Sectioncollects, processes and disseminatesmonetary developments informationderived from the preliminary ten-day datareceived from the banking system;

4) the Balance of Payments CompilationDivision collects, processes and analysesthe data necessary to compile Poland’sb.o.p., external debt and i.i.p.;

5) the Non-banking Statistics Division collectsthe data necessary to compile the b.o.p.on a transaction basis;

6) the Balance of Payments Methodology andAnalysis Section is responsible for anymethodological and analytical tasks relatedto the b.o.p. or the i.i.p.;


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7) the Non-financial Sector Section collectsand analyses data on the non-financialsector response to monetarydevelopments;

8) the Administration Section deals with staffaffairs and general organisational issues;and

9) the Information Technology Sectionprovides IT services to the Department.


Under the Constitution of the Republic ofPoland of 2 April 1997 (Article 227), the NBPis the central bank of the State and has theexclusive right to issue legal tender as well asto develop and pursue monetary policy. TheNBP acts in accordance with the Act on theNBP of 29 August 1997 (Dziennik Ustaw(Journal of Laws) No. 140, item 938).




The basic objective of the NBP is to maintainprice stability while – at the same time –acting in support of the Government’seconomic policies, insofar as this does notimpair the pursuit of the Bank’s basicobjective (Act on the NBP, Article 3.1). Thisobjective is pursued by:

a) developing and implementing monetarypolicy;

b) creating the institutional basis to ensurethe requisite level of financial safety andstability within the banking sector; and

c) regulating the relevant principles andmechanisms to guarantee the liquidity ofmonetary settlements within the country.


According to the Act on the NBP, theresponsibilities of the NBP also include:

1) organising monetary settlements;

2) managing the official foreign currencyreserves;

3) conducting foreign currency operationswithin the bounds stipulated by the Statute;

4) providing banking services to the centralgovernment;

5) regulating the liquidity of banks andproviding them with refinancing facilities;

6) establishing the conditions necessary forthe development of the banking system;and

7) drawing up the balance of payments andbalances of foreign assets and liabilities ofthe State.

The NBP is responsible for the safety andsoundness of the entire banking system. In itscapacity as the bankers’ bank, the NBPexercises supervision over the operations ofcommercial banks and, in particular, monitorstheir compliance with the provisions of theBanking Act through the intermediation ofthe Commission for Banking Supervision. TheCommission is headed by the President ofthe NBP. The executive agency of theCommission is the General Inspectorate forBanking Supervision (GINB) which is anautonomous institution within the structureof the NBP. In addition to its supervisoryfunctions, the NBP also performs regulatoryfunctions in relation to commercial bankswith a view to ensuring the safety of thosebanks and their deposits, as well as tomaintaining liquidity within the bankingindustry as a whole. The issues covered bythese standards include the definition ofcapital components, asset classification andspecific provisioning, as well as risk-based


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capital requirements. In this latter function,the NBP also acts as a lender of last resort.In the event of a commercial bank sufferingtemporary liquidity problems, it may apply tothe NBP for financial assistance in the formof either a rediscount or a Lombard loan.

In discharging its responsibilities, the NBPcollaborates with the appropriate centralgovernment bodies to develop and implementnational economic policies, contributes to thedevelopment of central government financialplans and presents its opinion on draftlegislation relating to economic policy andbank operations, thus striving to ensure theproper implementation of the monetarypolicy guidelines.



The NBP’s responsibilities in the field ofstatistics are entrusted to the StatisticsDepartment, whose main tasks are as follows:

• organising and co-ordinating monthlyreporting under the Bank StatisticalInformation System (BISS), which providesdata for monetary policy and supervisorypurposes, as well as for the system ofinterim (ten-day) reports on selectedmonetary aggregates;

• maintaining statistical records of thebalance of payments (on a monthly basis),indebtedness and foreign obligations on thebasis of bank and non-bank reports(including collaboration with regional NBPbranches in collecting and analysing thestatistical data required to compile thebalance of payments and the balance offoreign assets and liabilities of the centralgovernment);

• presenting and outlining economicstatistics on non-financial counterpartieswith reference to the principalcharacteristics of their economic situation(including collaboration with regional NBPbranches in surveys of the corporatesector);

• conducting monthly analyses of changes inbasic monetary aggregates, including Divisiaindexes, and developments affectingparticular items of the balances of centralgovernment assets and liabilities;

• preparing and publishing aggregate data andperiodic assessments of the assets andliabilities of commercial banks, the NBPand the banking system as a whole, and ofthe balance of payments and balances offoreign assets and liabilities of the State;

• conducting methodological studiesregarding monetary statistics, the balanceof payments and the internationalinvestment position;

• co-ordinating the performance of tasksarising from Poland’s participation in theSpecial Data Dissemination Standard(SDDS) of the International Monetary Fund(IMF), including, in particular, work relatedto updating the meta-data contained onthe IMF’s online Dissemination StandardsBulletin Board;

• compiling two monthly publications:Preliminary Information and theInformation Bulletin;

• organising and disseminating statistical datato internal and external users; and

• submitting statistical information tointernational organisations (the IMF, theWorld Bank, the Organisation forEconomic Co-operation and Development(OECD), Eurostat, the European CentralBank and the Bank for InternationalSettlements (BIS)).


Poland


The Central Statistical Office (GUS) isauthorised to collect data from all availablesources and to gather statistical data fromand about economic entities and theiroperations as well as from and aboutindividuals and their situations (Act on PublicStatistics of 29 June 1995, Journal of Laws No.88). The main areas of statistical researchconducted by the GUS are: population,structure of the state, economy, science andtechnical progress, external economicrelations, enterprises’ performance, andnational accounts. The scope of researchareas for subsequent years is defined on anannual basis in the Programme for PublicStatistics, issued in the form of the Resolutionof the Council of Ministers.

The Ministry of Finance (MF) is responsible(under the Act on Public Finance of 26November 1998, Journal of Laws No. 155,item 1014) for collecting and disseminatingdata on the total financial operations of thepublic finance sector, including, in particular,income and expenditure, claims and liabilities,guarantees and sureties.

The NBP co-operates with domesticorganisations (mainly the GUS and the MF)and foreign institutions in data exchange andother tasks related to monetary statistics,the b.o.p., the i.i.p. and banking sectorstatistics (in the case of the GUS, this includesthe methodology of statistical research).


See Table 1.

Table 1



and counterparts

Collected data

Collecting agents

Description

Users

– Basic NBP interest rates.

– Yield on Treasury securities.

– Interbank rates.

– Interest rates on deposits and loans offered by banks.

– Volume of securityissues and financialoperations related toTreasury securitiesissued on domesticand foreign markets.

– Bank liabilities on theissue of ownsecurities.

– Securities issued byresident sectors(except Treasurysecurities).

NBP NBP, MF MF, NBP

NBP, GUS, BFG MF, NBP MF, NBP

– Detailed data provided bybanks on a monthly basis (witha 10-day time lag) andaggregated by the NBP.

– Preliminary data provided bybanks on a ten-day basis (witha two-day time lag) related tobasic monetary aggregates.

– Bank balance sheet.

– Additional information on thebank balance sheet.

– Off-balance sheet liabilities.

– Preliminary data on mainassets and liabilities of banks.

– NBP balance sheet.

– Decisions on basic NBP interest rates (rediscount andLombard loans) are taken by the Monetary PolicyCouncil and immediately announced via the pressand other media.

– Data on the prices and yield of Treasury securitiesare collected and provided to the NBP by the MF ona monthly basis.

– Interest rates on basic categories of deposits andloans (denominated in Polish zloty (PLN) andforeign currencies) offered by 11 major commercialbanks, and submitted on a monthly basis.

– Data collected by theMinistry of Finance.

– Data collected withinthe framework of theBISS system on amonthly basis (with a10-day time lag).

– Data collected withinthe framework of theBISS system on amonthly basis (with a15-day time lag).


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Table 1 (continued)


Collected data

Collecting agents

Users

Description Data collected within theframework of the BISSsystem on a monthly basis(with a 10-day time lag),and quarterly basis (with a10-day time lag).

Data on outstandingdemand deposits and timedeposits for each day in thereporting period collectedwithin the framework of theBISS system.

Financial assets andliabilities arising fromtransactions amongdomestic entities, andbetween these entities andabroad.

Data on the current account(imports, exports, income,current transfers), capitalaccount and financialaccount.

NBP GUS, NBP, MF NBP, BH NBP

NBP GUS, NBP, MF NBP, GUS, MF NBP, GUS, MF

The reserve base iscalculated as an arithmeticmean of the stock of theabove deposits as of eachday of any month. Thisinformation is required on amonthly basis.

Financial accounts arecompiled by the GUS.

The above data are collectedon a cash basis (monthly)and on a transaction basis(annually). The first data arereceived within fiveworking days and the latterwithin five monthsfollowing the end of thereporting period.

• Bank balance sheet.

• Additional informationon the bank balancesheet.

• Profit and loss account.

• Additional informationon the profit and lossaccount.

• Bank exposure.

• Risk-weighted assets andliabilities structure.




Banks are obliged to report information tothe NBP under the Act on the NBP andResolution No. 3/2002 of the ManagementBoard of the NBP of 15 February 2002 onthe manner and detailed principles ofsubmission by banks to the NBP of datanecessary for the development of monetarypolicy, the periodic evaluation of the State’smonetary stance and the evaluation of thefinancial situation of banks as well as bankingsector risk.

An integrated, standard reporting system wasdeveloped under the Accountancy Act of 29September 1994 (Journal of Laws No. 121,item 591, as amended), and the followingexecutive regulations issued under the aboveact:

• Resolution No. 1/98 of the Commissionfor Banking Supervision of 3 June 1998 onthe specific principles of banks’ accountingrules and compilation of additionalinformation (Dziennik Urzêdowy NBP(Official Journal of the NBP) No. 14, item27, as amended); and

• Regulation of the NBP President No. 4/95of 22 February 1995 on model charts ofaccounts for banks (Official Journal of theNBP No. 6, item 11, as amended),

• Resolution of the Minister of Finance of 10December 2001 on the principles ofmaking reserves for risks associated withbanking activity (Journal of Laws of 22December 2001 No. 149, item 1672),

• Resolution of the Minister of Finance of 12December 2001 on specific principles ofrecording, valuation, recognition andpresentation of financial instruments


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(Journal of Laws of 22 December 2001 No.149, item 1674),

• Resolution of the Minister of Finance of 12December 2001 on the specific principlesof banks’ accounting rules (Journal of Lawsof 22 December 2001 No. 149, item 1673),

• Resolution of the Minister of Finance of 12December 2001 on a model chart ofaccounts for banks (Journal of Laws of 28December 2001 No. 152, item 1727), and

• Resolution of the Minister of Finance of 12December 2001 on banks’ consolidatedfinancial statements and financial holdings’consolidated financial statements (Journalof Laws of 28 December 2001 No. 149,item 1728).


Starting from March 2002, the ESA 95 sectorand sub-sector classification has been used,and monetary aggregates and counterpartscompiled in line with the ECB requirements,which is the first methodological step towardsfull consistency with these requirements.



According to the Foreign Exchange Law of 27July 2002 (Journal of Laws No. 141, item 1178),the term “resident” refers to:

a) a natural person with a permanentresidence in the country and a legal personwith a permanent residence in the country,as well as any other entity with apermanent residence in the country havingthe ability to incur obligations and acquirerights in its own name; and

b) Polish diplomatic representative offices,consulates and other Polish representativeoffices and special missions granteddiplomatic or consular immunities andprivileges.

According to the Foreign Exchange Law,branches of domestic banks abroad areconsidered to be non-residents, whilebranches of foreign banks in Poland aretreated as residents.

The term “domestic economic territory”refers to the territory of the Republic ofPoland.



In the Polish banking and financial statistics,the following categorisation of economicentities is applied:

Financial sector

• Central bank

• Other monetary financial institutions(MFIs)


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• Other financial intermediaries, exceptinsurance companies and pension funds

• Financial auxiliaries

• Insurance corporations and pension funds

Non-financial sector

• Non-financial corporations

• Households

• Non-profit institutions serving households

General government

• Central government

• Local government

• Social security funds

Non-resident

• Financial sector

• Non-financial sector

• General government

A detailed description of the above sectors ispresented in Table 2.


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Table 2

Money-creating sector Financial sector Central bank

Money-holding sector Non-financialsector

State-ownedenterprisesand companies

Entities whose principalactivity is the production ofgoods and non-financialservices, entities engaged innon-financial activity andhouseholds.

Enterprises operating under the Act onstate-owned enterprises of25 September 1981 (Journal of Laws of1991 No. 18, item 80) and state-ownedcompanies, i.e. companies:

– in which the State Treasury holds atleast 50% of the capital;

– in which a state-owned companyholds at least 50% of the capital;

– in which a State Treasury companyholds at least 50% of the capital;

– in which the State Treasury, a state-owned company and a StateTreasury company hold in total atleast 50% of the capital.

Privateenterprises andco-operatives

Enterprises and companies wholly heldby the private sector and companies thatfail to meet the criteria set for state-owned companies, as well as all co-operatives and companies, branches offoreign enterprises, and producergroups. This category also includesnatural persons conducting economicactivity for their own account thatemploy more than 9 persons.

Individualentrepreneurs

Entities which are principally engaged in financial intermediation, i.e.acquiring financial assets and at the same time incurring liabilities ontheir own account by engaging in financial transactions, and inauxiliary financial services, i.e. activities closely related to financialintermediation but which are not financial intermediation themselves.This category covers the National Bank of Poland and commercialbanks.

Other monetaryfinancialinstitutions

Other financialintermediaries,except insurancecorporations andpension funds

Financialauxiliaries

Financial corporations which are principally engaged in financialintermediation by incurring liabilities in forms other than currency,deposits and/or close substitutes for deposits from institutional unitsother than MFIs.

Financial corporations which are not engaged in financialintermediation themselves, but which facilitate this intermediation.

Insurancecorporationsand pensionfunds

Entities offering insurance protection (insurance products) andaccomplishing their objectives and tasks through an insurancecompany in the form of a share company or mutual insuranceassociation, operating under the Act on insurance activity of 28 July1990 (Journal of Laws No.59, item 344), and entities whose principalactivity is to gather and invest funds with the aim of repaying them tothe fund’s members after they have retired, which operate under theAct on pension funds (Journal of Laws No. 139, item 934).


Non

-fin

anci

al c

orpo

ratio

ns

Natural persons conducting economicactivity for their own account to whoma reporting bank grants services relatedto their activity, employing up to 9persons.

Hou

seho

ld


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Table 2 (continued)

Individuals

Money-neutralsector

Generalgovernment

Central government

Non-resident sector Non-resident

Money-holding sector Natural persons other than thoseclassified as individual entrepreneurs orfarmers.

Natural persons whose principal sourceof income is agricultural production andwhose activity has not been registeredas an enterprise, company, co-operativeor producer group.

Farmers

Non-profit institutions that areseparate legal entities servinghouseholds and whose principalresources, apart from those derivedfrom occasional sales, are derivedfrom voluntary contributions in cashor in kind from households, frompayments made by generalgovernment or from property income.

Non-profitinstitutionsservinghouseholds

All institutional unitsentirely or predominantlyfinanced from public funds,except for state-ownedenterprises, state-ownedbanks, and enterprisesestablished under theCommercial Code.

All administrative departments of theState and other central agencies whosecompetence extends over the wholeeconomic territory, except for theadministration of social security funds.

All central and local institutional unitswhose principal activity is to providesocial benefits and which fulfil each ofthe following two criteria:

a) by law or by regulation, certaingroups of the population are obligedto participate in the scheme or to paycontributions;

b) general government is responsiblefor the management of the institutionin respect of the settlement orapproval of contributions andbenefits.

A natural person with a permanentresidence outside the country and anyother entity with a permanent residenceoutside the country that has the abilityto incur obligations and acquire rightsin its own name.

All public administration units whosecompetence extends to only a local partof the economic territory, apart fromlocal agencies of social security funds.

Local government


Hou

seho

lds

Money-holdingsector


Poland


See Table 3.

S22


Table 3

Country ECBsector Sectors Sectors in the ESA 95 sector



Financial sector S121

Central bank


S122

Other monetaryfinancial institutions S12

Financial corporationsMoney-holdingsector

S123


and pension funds

Money-holdingsector

S124


S125


Money-neutralsector

General government S1311

Central government

S13

General government

Money-neutralsector

S1312

State government

Money-holdingsector

S1313

Local government

S1314


Non-residentsector

S211

EUcountries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212


Central bank

Banks

Non-financialcorporations


Households

S11


S14

Households

S15


Central government

n.a.

Local government


Non-resident Financial sector


General government


and pension funds



Non-profit institutionsserving households

Money-holdingsector


Poland



In Poland the reporting population comprisesbanks and branches of foreign banks operatingin Poland.

According to the Banking Act of 29 August1997 (Journal of Laws No. 140, item 939), “abank shall constitute a legal person,established pursuant to the provisions of theStatute, operating on the basis ofauthorisation to conduct banking operationsthat expose to risk funds which have beenentrusted to the bank and which are in anyway repayable. Banking operations shallcomprise:

1) accepting deposits payable on demand orat a specified maturity, and operating suchdeposit accounts;

2) operating other bank accounts;

3) extending loans;

4) extending bank guarantees;

5) issuing bank securities;

6) performing bank settlements; and

7) performing other operations reservedexclusively for banks under separatelegislation”.

Existing regulations provide for the conceptof a credit institution; however, this is only inrelation to entities operating on the territoryof the European Union Member States.


According to preliminary analysis, someinvestment funds fulfil the criteria for “money

market funds”. The volume of their activity ismonitored on an ongoing basis.


Not applicable.


The majority of banks in Poland are universalbanks offering traditional banking productsand services to individual and corporatecustomers. For individual customers, banksoffer current accounts and a wide range ofPLN-denominated and foreign currency-denominated deposits with fixed or floatinginterest rates with the option of placing fundson any terms, even those that are non-standard. Banks also accumulate fundsthrough the issue of savings bonds andcertificates of deposits, which are acquiredmainly by households.

Banks grant different types of consumer andinvestment loans, e.g. hire purchase andhousing loans, loans for the purchase of carsand for economic activity, preferential loansfor agricultural activity, etc. Banks specialisingin servicing the corporate sector offercompanies packages of services comprisingbasic banking services, including a simplifiedprocedure enabling quick access to currentaccount credit.



Credit institutions 666State-owned banks 8Private banks 54Co-operative banks 604

Other monetary financial institutions n.a.

Total 667



Poland



Assets

1) Credit to domestic residents: credits andloans, debts purchased, guaranteesrealised, interest due on performing andnon-performing claims on and repurchaseagreements with domestic sectors. Theitem is broken down by credit to generalgovernment and other domestic sectors(i.e. non-MFIs and the non-financial sector).

2) Holdings of securities other than sharesissued by domestic sectors: debt securitiesissued by domestic sectors broken downby general government and other domesticsectors (i.e. non-MFIs and the non-financialsector).

3) Holdings of shares/other equity issued bydomestic sectors: holdings of equitysecurities (shares, participation units,investment certificates and fixed financialassets) issued by domestic sectors.

4) Foreign assets: claims on non-residentsdenominated in foreign currencies and inPLN.

5) Fixed assets: non-financial fixed assets,intangible assets, etc.

6) Other assets: items not includedelsewhere, i.e. interest accrued, settlementaccounts, deferred income andexpenditure, or settlements with sundrycounterparties.

Liabilities

1) Currency in circulation: notes and coins incirculation.

2) Deposits of central government: all typesof deposits and other liabilities towardscentral government.

3) Deposits of other domestic sectors:deposits of other general government andother domestic sectors broken down byovernight deposits, deposits with agreedmaturity, deposits redeemable at noticeand repurchase agreements.

4) Debt securities issued: issue of own debtsecurities by MFIs.

5) Capital and reserves: paid-in share capital,reserve capital, general risk reserves,specific provisions, profit/loss, revaluationreserve.

6) Foreign liabilities: liabilities to non-residents in foreign currencies and in PLN,except for MFIs’ capital and supplementaryfunds paid in by non-residents.

7) Other liabilities: items not includedelsewhere, e.g. interest accrued.

8) Excess of inter-MFI liabilities: inter-MFIcredits less deposits.


The balance sheet items of other MFIs arebroken down by sector, type of operation,currency (PLN and foreign currencies),residency (residents and non-residents),original and remaining maturity.

On the assets side, MFIs report the stock ofoutstanding claims on each sector (brokendown into sub-sectors), subdivided intoperforming claims, claims under surveillanceand non-performing claims (the latter brokendown further into substandard, doubtful andloss claims). The original maturities of claimsare presented in the following ranges: up toone year (including current accounts); overone year up to two years; over two years upto three years; over three years up to fiveyears; and over five years. For remainingmaturities, claims are subdivided into thefollowing time ranges: up to one month; over


Poland

one month up to three months; over threemonths up to six months; over six months upto one year; over one year up to three years;over three years up to five years; over fiveyears; and past due claims. Debt securitiesheld in MFIs’ portfolios are broken down bytype (i.e. quoted and unquoted; held for tradeand investment purposes), issuer, originalmaturity (up to three months; over threemonths up to six months; over six months upto nine months; over nine months up to oneyear; bonds up to one year; over one year upto three years; over three years up to fiveyears; over five years), and the currency ofissue (PLN and foreign currencies).

Liabilities-side instruments are broken downby type (overnight, with agreed maturity,redeemable at notice and escrow deposits,credits and loans received), currency ofdenomination (PLN and foreign currencies)and sector. Time liabilities are broken downby remaining maturity range (up to onemonth; over one month up to three months;over three months up to six months; over six

months up to one year; over one year up tothree years; over three years up to five years;over five years), as well as by original maturityrange (up to one month; over one month upto three months; over three months up tosix months; over six months up to one year;over one year up to two years; over twoyears). Liabilities arising from securities issuedare broken down by type (bonds, certificates,others) and remaining/original maturities (thesame as for other liabilities).



Under its strategy of direct inflation targeting,the NBP does not determine an intermediaryobjective in terms of money supply growth;however, it calculates and publishes fourmonetary aggregates: M0, M1, M2 and M3.See Box 1.

Box I


Money in circulation (including vault cash)

MFIs’ current accounts


Money in circulation (excluding vault cash)

PLN and foreign currency overnight deposits of:

– Households

– Non-financial corporations

– Non-profit institutions serving households

– Non-monetary financial institutions

– Local government

– Social security funds


M1

PLN and foreign currency deposits with agreed

maturity up to 2 years and deposits redeemable at

notice of up to 3 months of:

– Households

– Non-financial corporations

– Non-profit institutions serving households

– Non-monetary financial institutions

– Local government

– Social security funds


M2

Repurchase agreements with non-MFIs

Debt securities with maturity up to 2 years issued by

MFIs and bought by non-MFIs


Poland


Negotiable instruments included in monetaryaggregates comprise cash, certificates ofdeposits and bonds issued by banks. Owingto the nature of negotiable instruments suchas banknotes and coins in circulation,certificates of deposits and short-termsecurities (bills), it is not possible to producea full breakdown by sector of theseinstruments, and such information is generallynot available in the reports submitted by MFIs.

Box 2

Foreign assets (net) comprise claims on non-residents in convertible and non-convertible currencies, in PLN

less claims to non-residents in convertible and non-convertible currencies, and in PLN, except for MFIs’

capital and supplementary funds paid by non-residents.

Credit to other domestic sectors comprises credits and loans, debts purchased, guarantees and sureties and

interest due on performing and non-performing claims on households, non-monetary financial institutions,

non-financial corporations, non-profit institutions serving households, local government and social security

funds as well as securities other than shares, and shares/other equities issued by the above sectors.

Credit to central government (net) comprises total claims on central government, including claims on

securities issued by central government and held by MFIs, less liabilities to the central government sector.

Longer-term financial liabilities cover deposits with agreed maturity over 2 years, household deposits

redeemable at notice over 3 months, non-monetary financial institutions, non-financial corporations, non-

profit institutions serving households, local government and social security funds, debt securities issued with

maturity over 2 years (issued by MFIs and bought by non-MFIs), as well as capital and reserves.

Fixed assets (excluding fixed financial assets)

Other items (net) comprise the following major items: MFIs’ income and expenditure, MFIs’ funds, inter-

MFI and intra-MFI settlements, settlement accounts, inter-MFI balances, specific provisions.

The amount of banknotes and coins held bythe non-financial sector is derived bydeducting the value of MFIs’ vault cash fromthe value of cash in circulation. In thestatistics of securities issued by MFIs andpurchased on the primary market, only thevalue of securities held by MFIs may bedistinguished.


See Box 2.


Poland

The described classification of credit todomestic residents is described in the tablebelow.

2.8 Reserve money

Reserve money of the NBP includes:

1. Cash in circulation (including vault cash);and

2. MFIs’ current accounts.

By sector By type By maturity Other

Financial sector– MFIs– Insurance corporations and

pension funds– Other financial

intermediaries– Financial auxiliaries

Non-financial sector– Non-financial corporations

– State-owned enterprises– Private companies and

co-operatives– Households– Individual entrepreneurs– Individuals– Farmers

– Non-profit institutionsserving households

General government– Central government– Local government– Social security funds

– Current account loans– Discount loans– Export credits– Investment credits– Mortgage loans, of which

housing loans– Loans for the purchase of

securities– Credit card-related loans– Other loans

Original maturity– Up to one year– One to two years– Two to three years– Three to five years– Five to ten years– Ten to twenty years– Over twenty years

Residual maturity– Current accounts– Up to one month– One to three months– Three to six months– Up to one year– One to three years– Three to five years– Five to ten years– Ten to twenty years– Over twenty years

– Domestic/foreign currency

– Performing/non-performing claims(substandard, doubtful,loss)



Monetary statistics are collected by the NBPin accordance with Article 23.4 of the Act onthe NBP of 29 August 1997 (Journal of LawsNo. 140, item 938, of 1998 and No. 160, item1063) and issued in accordance withResolution No. 3/2002 of the ManagementBoard of the NBP of 15 February 2002 onthe manner and detailed principles ofsubmission of data necessary for thedevelopment of monetary policy by banks tothe NBP, the periodic evaluation of the State’smonetary stance, and the evaluation of banks’financial situation and banking sector risk.


Poland






State-owned banks 8 100 19.8

Private banks 58 100 55.3

Co-operative banks 607 100 3.8

Other monetary financial institutions 0 - -

Total 674 - 100



In Poland, the reporting obligation is bindingupon banks and branches of foreign banksoperating in Poland.

See Table 5.


MFIs prepare reports at the followingfrequency:

• ten-day: selected assets and liabilities ofthe respective MFI;

• monthly: general information on therespective MFI, balance sheet, additionalinformation, off-balance sheet liabilities andappendixes to the balance sheet; and

• quarterly: profit and loss account,supervisory appendixes.

MFIs submit the above data to the NBP’sStatistics Department by the followingdeadlines:

• by the end of the second working dayfollowing the tenth, twentieth and last dayof each reporting month;

• by the end of the tenth working dayfollowing each reporting month;

• by the end of the tenth working dayfollowing the month ending the reportingquarter in question; and

• for quarterly reporting on the number ofaccounts and securities issues, by the endof the fifteenth working day following themonth ending the reporting quarter.

Monthly reporting is compiled using theWEBIS IT system, designed specifically forthis purpose and provided by the NBP toeach reporting agent. The system generatesreports in electronic form. The ten-dayreporting data are received by the StatisticsDepartment in electronic form or on hardcopy (by fax).

Co-operative banks submit their reporting tothe NBP indirectly through their respectiveregional or associate banks. Othercommercial banks submit their reportsdirectly to the NBP’s Statistics Department.

The standard reporting system is regulatedby the Accountancy Act of 29 September1994 (Journal of Laws No. 121, item 591, asamended) and the following executiveregulations:

• Resolution No. 1/98 of the Commissionfor Banking Supervision of 3 June 1998 on


Poland

the specific accounting principles for banksand the compilation of additionalinformation (Official Journal of the NBP No.14, item 27); and

• Regulation of the NBP President No. 4/95of 22 February 1995 on model charts ofaccounts for banks (Official Journal of theNBP No. 6, item 11, as amended),

• Resolution of the Minister of Finance of 10December 2001 on the principles ofmaking reserves for risks associated withbanking activity (Journal of Laws of 22December 2001 No. 149, item 1672),

• Resolution of the Minister of Finance of 12December 2001 on specific principles ofrecording, valuation, recognition andpresentation of financial instruments(Journal of Laws of 22 December 2001 No.149, item 1674),

• Resolution of the Minister of Finance of 12December 2001 on specific principles ofbanks’ accounting rules (Journal of Laws of22 December 2001 No. 149, item 1673),

• Resolution of the Minister of Finance of 12December 2001 on a model chart ofaccounts for banks (Journal of Laws of 28December 2001 No. 152, item 1727), and

• Resolution of the Minister of Finance of 12December 2001 on banks’ consolidatedfinancial statements and financial holdings’consolidated financial statements (Journalof Laws of 28 December 2001 No. 149,item 1728).


The NBP’s balance sheet is compiled on adaily basis. It includes detailed informationabout the NBP’s activities. In accordance withSDDS requirements, the NBP disseminatesits balance sheet (monetary presentation) ona monthly basis with a seven-day time lag.It is presented on the NBP’s website

(http://www.nbp.pl/statystyka/index.html) andcomprises selected items of the NBP’sbalance sheet, i.e. foreign assets (net), officialreserves, loans granted, open marketoperations (net), net credit to generalgovernment, reserve money of the NBP, cashin circulation and liabilities to domestic banks.The NBP also publishes an accounting balancesheet which is more detailed and includessuch items as basic assets (gold, cashdenominated in foreign currencies, Poland’scontributions to the IMF and the InternationalBank for Reconstruction and Development(IBRD), foreign currency deposits, refinancing,rediscount and Lombard loans, credit togeneral government, Treasury securities) andother assets, cash in circulation, NBP debtsecurities issued, deposits, other liabilities anddeferred income, funds and reserves. Thisbalance sheet is presented net, i.e. liabilitiesare shown net of provisions.

According to the Act on the NBP, theaccounting principles of the NBP must complywith the International Accounting Standards.



Data submitted to the NBP by reportingagents are presented as the stock of assetsand liabilities as of the end of the reportingperiod at their balance sheet value.

2.10.2 Revisions

The database operated by the NBP is “live”and subject to changes resulting fromrevisions made by reporting agents. Publisheddata may also be subject to change andrevision in case of errors subsequentlycorrected by reporting agents. Decemberdata are revised and considered final onlywhen the annual balance sheet has beenaudited and any revisions have beensubmitted to the NBP.


Poland


The NBP provides information about anymethodological changes implemented in thereporting procedure that result in breaks inseries (recent changes were introduced inMarch 2002) on the NBP’s website. Suchinformation is also published in themethodological notes to the “InformationBulletin”. Data time series have been adjustedbackwards starting from the data for the endof December 1996 (partly based onestimates).

Statistical preparations necessary to compileflow statistics as far as possible in accordancewith the requirements set out in ECB/2001/13 are being finalised. The collection of firstreturns from reporting agents is envisagedfor end-2003.


Since December 1999, monthly “InformationBulletins” have included seasonally adjustedtime series for the following aggregates:monetary aggregates M0, M1 and M3, claimsof commercial banks on total domesticsectors, households and non-financialcorporations, deposits of commercial banksto total domestic sectors, households andnon-financial corporations. Calculations ofseasonally adjusted time series are performedvia the SAS (Statistical Analysis System)application, using the X-11 method ofseasonal correlation and decomposition.

2.11 Publications


The NBP’s Statistics Department providesequal access to data for all users accordingto the calendar of data disseminationpublished on the NBP’s website (http://www.nbp.pl), which is the first availablesource of data for external users. The

following monetary statistics data areavailable:

• Broad money M3 and its counterparts(preliminary data) (published on a monthlybasis with a 14-day time lag);

• Reserve money and counterparts(published on a monthly basis with a seven-day time lag).

In addition, the NBP’s website contains thefollowing monthly data:

• Central bank instruments;

• Exchange rates (USD and EUR);

• Weighted average interest rates ondeposits and credits;

• Aggregated balance sheet of other MFIs;

• Balance sheet of the National Bank ofPoland (accounting presentation);

• Consolidated balance sheet of MFIs (finaldata);

• Monetary aggregates;

• M3 and counterparts;

• Reserve money and counterparts;

• Poland’s balance of payments on a cashbasis;

• Official reserve assets;

• Poland’s external debt;

• Poland’s balance of payments on atransaction basis;

• International investment position, and

• International reserves and foreign currencyliquidity.


Poland

The NBP’s website also provides thefollowing daily data:

• Exchange rates (average, bid and offer);

• Financial market ratios;

• Interest rates; and

• The stock price index (link to the WarsawStock Exchange website).


The core NBP reports published on a monthlybasis are as follows:

• Preliminary Information: a short monthlypublication including preliminary data oneconomic developments, on the other MFIsand the NBP’s balance sheets. Thispublication is available on hard copy.

• The NBP Information Bulletin: a monthlyrelease with a three-month delay, itpresents basic data related to general

economic and financial developments andthe NBP’s policies. Quarterly issues alsoinclude descriptions of basic monetary andmacroeconomic trends. The Bulletin is alsoavailable in electronic form on the NBP’swebsite (http://www.nbp.pl/publikacje).

All the publications listed above are availablein both Polish and English.


• The Annual Report: this yearly publicationincludes data on general economic andfinancial developments and banking sectordevelopments, as well as the balance sheetsof the NBP, the banking system andPoland’s balance of payments. The AnnualReport is published in Polish and English.

• The Inflation Report: a publication dealingwith inflationary trends, the monetaryaspects of inflation and the non-monetaryfactors, both external and internal, thataffect inflation. The Inflation Report ispublished in Polish and English.

3 Contacts at the National Bank of Poland


Anna Lewandowska,Adviser to the President,Department of Statistics,e-mail: [email protected];tel. 48-22 6532790;fax: 48-22 6532291Joanna Glowala,Department of Statistics,e-mail: [email protected];tel. 48-22 6531229;fax: 48-22 6532291


Poland

Annex 1


Poland

Organisation chart of the Statistics Department of the NationalBank of Poland (NBP)

Director

Deputy

Director

Banks’ Balance

Sheet Division

Deputy

Director

Balance of Payments

Compilation

Division

Non-financial

Sector

Section

Non-banking

Statistics

Division

Administration

SectionAnalysis Division

Information

Technology

Section

Balance of Payments

Methodology

and Analysis Section

Preliminary

Information Section

Independent Position

for b.o.p. Current

Account Statistics


for Non-bank

Monetary Statistics


for Merchandise

Trade Statistics

Annex 2


Poland

Romania


Romania






NBR National Bank of Romania

ROL Romanian leu

SDRs Special Drawing Rights


Romania




See Annex 1.


The Statistics Department is organisedhorizontally following the flow of information(in-processing-out) related to money andbanking statistics and external sectorstatistics. The Statistics Department has 3divisions: Reporting (for data collection);Processing (for data processing); andStatistical Analysis and Information (for dataanalysis and dissemination).

See Annex 2.


The legal framework for the activitiesperformed by the National Bank of Romania(NBR) is laid down by the following:

• Law no. 101/1998 regarding the Statuteof the NBR, as further amended andsupplemented by the GovernmentEmergency Ordinance no. 136/2001,approved by Law no. 407/2002;

• Law no. 58/1998 – the Banking Act, asfurther amended and supplemented byGovernment Emergency Ordinance no.137/2001, approved by Law no. 357/2002;

• Government Emergency Ordinance no.97/2000 regarding credit co-operativeorganisations, approved and amended byLaw no. 200/2002;

• Law no. 541/2002 – Law on savingsinstitutions financing the housing sector,entering into force on 1st January 2003.

The activities of the NBR are also governedby regulations issued by it, namely:

a. Monetary policy:

• Regulation no. 1/2002 regarding themoney market operations performed bythe NBR and the lending/grantingfacilities granted to banks;

• Regulation no. 6/2002 regarding theminimum reserve requirements.

b1. Prudential banking supervision:

• Rules no. 2/1999 regarding the licensingof banks, as further amended andsupplemented by the Rules no. 4/2002;

• Rules no. 3/1999 regarding amendmentsto the status of banks, as furtheramended and supplemented by Rules no.11/1999, Rules no. 8/2000 and Rules no.5/2002;

• Rules no. 16/2002 regarding theminimum capital requirements for banks;

• Rules no. 7/1999 regarding banks’ ownfunds;

• Rules no. 8/1999 regarding the limitationof the credit risk of banks, as furthersupplemented by Rules no. 11/2002;

• Rules no. 5/2000 regarding the mergerand demerger of banks;

• Regulation no. 2/2000 regarding theclassification of credits, investments, aswell as the establishment, regulation anduse of specific credit risk provisions (inthe application of which MethodologicalRules No. 2/2000 were issued). Thisregulation will be replaced by Regulation


Romania

no. 5/2002 regarding the classification ofcredits, investments, as well as theestablishment, regulation and use ofspecific credit risk provisions (in theapplication of which MethodologicalRules No. 12/2002 were issued), enteringinto force on 1st January 2003;

• Rules no. 4/2001 regarding supervisionof the foreign exchange positions ofbanks;

• Rules no. 1/2001 regarding banks’liquidity, as further amended andsupplemented by Rules no. 1/2002;

• Rules no. 3/2002 regarding the “know-your-customer” standards;

• Rules no. 10/2002 regarding financialderivative instruments;

• Regulation no. 1/1999 regarding theorganisation and operation of the CreditInformation Bureau within the NBR, asfurther amended and supplemented byCircular no. 22/2002;

• Regulation no. 1/2001 regarding theorganisation and operation of thePayments Incidents Bureau within theNBR, as further amended andsupplemented by Circular no. 21/2002.

b2. Prudential supervision of credit co-operative organisations:

• Rules no. 7/2000 regarding the licensingof credit co-operative organisations, asfurther amended and supplemented byRules no. 2/2002 and Rules no. 15/2002;

• Rules no. 13/2002 regarding theminimum capital of credit co-operativeorganisations and the minimumaggregated capital of the credit co-operative networks;

• Rules no. 14/2002 regarding the own fundsof credit co-operative organisations and ofthe credit co-operative networks.

b3. Accounting rules for credit institutions:

• Order no. 1418/344 of 1 August 1998on the approval of a Chart of Accountsfor banks and methodological rulesregarding its use, updated version.

• Order no. 1524/362 of 20 July 1998 onthe approval of the layout of banks’financial statements and methodologicalrules regarding the drawing up and useof these statements, updated version.

• Order no. 1982/5 of 8 October 2001 onapproval of the Accounting Regulationsharmonised with Directive no. 86/635/EEC and with the InternationalAccounting Standards, applicable tocredit institutions.

• National Bank of Romania Rules no.8/2002 on drawing up consolidatedfinancial statements by credit institutions.

• National Bank of Romania Rules no.9/2002 on banks’ accounting of derivativesoperations and on drawing up specificfinancial accounting statements

c. Foreign exchange policy and management:

• Regulation no. 3/1997 regarding foreignexchange transactions, as furtheramended and supplemented by Circularsnos. 7/1998, 25/1998, 22/1999, 26/1999,34/1999, 26/2001 and 37/2002.

d. Operations on the Government’s account:

• Order no. 875/2001 issued by theMinister of Public Finance, the Governorof the National Bank of Romania and theVice-president of the National SecuritiesCommission, approving the Regulationon dealings in paperless governmentsecurities.

• Order no. 395/2/5C/2002 issued by theMinister of Public Finance, the Governorof the National Bank of Romania and theChairman of the National Securities


Romania

Commission, approving WorkingProcedures for the enforcement ofOrder no. 875/2001 concerning approvalof operations with paperless governmentsecurities.




The NBR is the central bank of Romania,having legal personality.

The fundamental objective of the NBR is toensure the stability of the national currencyin order to contribute to price stability. Inorder to attain this fundamental objective,the NBR elaborates, implements and isresponsible for monetary, foreign exchange,credit and payments policies, and for bankingand prudential supervision within theframework of the general policy of the State.The NBR aims to ensure the normaloperation of the banking system andparticipates in the promotion of a financialsystem suited to a market economy.

Likewise, the National Bank of Romania isresponsible for the licensing and prudentialsupervision of credit co-operativeorganisations and savings institutions financingthe housing sector (Law on savingsinstitutions financing the housing sector).


General responsibilities of the NBR:

(i) Monetary policy:

“Within the framework of the monetarypolicy, the NBR uses procedures andinstruments specific to money markets,lending to banks and controlling liquiditythrough the policy of minimum reserverequirements.”

(ii) Foreign exchange policy andmanagement:

“The NBR elaborates and implementsthe exchange rate policy, and establishesand monitors the enforcement of theforeign exchange regime on Romanianterritory.”

“The NBR acts as a State agent asregards the implementation of any legalregulation on foreign exchange controlon the legal persons licensed by it.”

(iii) Money issue:

“The NBR is the only institution authorisedto issue money in the form of banknotes andcoins as legal tender on Romanian territory.”

(iv) Operations with banks:

“According to its monetary, foreignexchange, lending and payment policies,the NBR may grant loans to banks, withup to 90-day maturity.”

“The NBR opens a current account forthe State Treasury, for each bank andfor each foreign bank branch and legalentity licensed to operate in Romania.”

“The NBR issues general regulationsregarding payment instruments, co-ordinates and supervises the domesticpayment system, and defines the steps tobe taken in order to prevent and removeany situation that might jeopardise thesound functioning of the payment systems.”

“The NBR may provide clearing,depository and payment services throughaccounts opened in its records.”

“In order to mitigate and hedge creditand payment-related risks, the NBR maysupply, against payment, data andinformation on payment incidents andlending risks in the banking system, incompliance with the confidentiality ofbanking operations.”


Romania

(v) Operations on the Government’saccount:

“The NBR keeps the general currentaccount of the Treasury opened in thename of the Ministry of Finance.”

(vi) Gold and foreign assets operations:

“The NBR, while observing the generalrules on liquidity and specific risk forforeign assets, sets and holdsinternational reserves in such a way asto periodically assess their exact size.”

(vii) Banking supervision:

“According to the provisions of thebanking legislation, the NBR hasexclusive competence in granting banksoperating licenses, and is responsible forthe prudential supervision of the banksit has authorized to operate in Romaniaas Romanian legal entities or foreign bankbranches. At the same time, accordingto the provisions of EmergencyOrdinance No. 97/2000, the NBR is incharge of licensing and supervision ofthe credit cooperatives organisations.”

(viii)Co-operation with State authorities:

“The NBR co-operates with central andlocal public authorities in fulfilling itsgoals.

In pursuit of its fundamental objective,the NBR will be required to state itspoint of view on public authorityregulations directly concerning monetarypolicy, banking activity, the foreignexchange regime and public debt.

Central administration budget bills areto be drafted in consultation with theNBR inasmuch as the terms of publicsector loans are concerned.

The NBR performs studies and surveyson currency, lending, banking operationsand payments for its own use or the useof public authorities.”

“In order to fulfil the commitmentsarising from agreements, treaties andconventions which Romania is part of,the NBR co-operates with competentnational and international authorities byproviding information, taking adequatemeasures or by any other means.”



The main responsibilities of the NBR in thefield of macroeconomic statistics consist ofthe compilation of monetary and bankingstatistics, balance of payments (b.o.p.)statistics and the financial accounts.


The NBR co-operates with the NationalInstitute for Statistics in the compilation ofthe Romanian national accounts, thecompilation of b.o.p. statistics and with theMinistry of Public Finance as regards thegovernment sector and the external sector.Prudential supervision is the exclusiveresponsibility of the NBR.


Romania


The primary statistical sources are providedby the Ministry of Public Finance (balancesheets of non-financial enterprises, insurance

companies and non-profit institutions) and bythe NBR (balance sheets of banks, monetarystatistics, b.o.p. statistics and prudentialindicators).

See Table 1.

Table 1



and counterparts

Collected data

Collecting agents

Description

NBR NBR NBR

Users

Balance sheet of the NBR,balance sheets of banks:

After having received the NBR’sbalance sheet from theAccounting Department betweenthe 15th and 20th day of themonth following the referencemonth, the Statistics Departmentproduces the analytical accountsfor the central bank within twodays. The compilation of theanalytical accounts within onemonth is deemed timely.

The accounts for commercialbanks are compiled on a monthlybasis. Banks transmit their dataon hard copy through theinterbank communicationnetwork to NBR’s StatisticsDepartment. According to theregulations, the commercialbanks must transmit therequested data between the 15thand 20th day of the monthfollowing the reporting date.

The monetary survey is compiledwithin five to seven days after thedata are obtained by the StatisticsDepartment from the AccountingDepartment and the commercialbanks. The data are generallyavailable by 25 days after thereference month.

Reporting of interest rate data by banks:

The commercial banks provide data on lending anddeposit rates to the NBR by the end of the 15th day afterthe reference month.

Reporting of securityissues data by banks:

The commercial banksprovide security issuesdata to the NBR by theend of the 15th day afterthe reference month.

NBR, National Institute forStatistics, Ministry of PublicFinance, other public authorities.

NBR, National Institute for Statistics, Ministry ofPublic Finance, other public authorities.

NBR, National Institutefor Statistics, Ministryof Public Finance, otherpublic authorities

Data are collected on paper and/or electronically.

Data are collected on paper and/or electronically. Data are collected onpaper and/orelectronically.


Romania

Table 1 (continued)


Collected data

Collecting agents

Users

Description

Balance sheets of the NBR(monthly/20 to 25 days afterthe reporting date).

Balance sheets of non-financial corporations,financial auxiliaries,insurance corporations,public institutions and non-profit institutions servinghouseholds; monetarysurvey; balance ofpayments.

Bank reports oninternational transactions,customs data on the balanceof trade (monthly/45-60days after the reportingdate).

NBR NBR NBR

NBR, National Institute forStatistics, Ministry of PublicFinance, other publicauthorities




Data are collected on paperand/or electronically.



Data are collected on paper.

Financial results andpatrimony statement;balance sheet and profit andloss account; level offoreign exchange position;own funds; solvency ratio;amount of the loans grantedto insiders; loanclassification and the settingup of risk provisions; riskprovisions for past dueinterests for some types ofloans granted and forplacements with otherbanks; net assets evaluation.

(monthly /10-15 days afterthe reporting date, in thecase of prudential reports,excepting foreign exchangeposition/1 to 3 days after thereported date;quarterly/30days after the reporting date,in the case of financialreports)

NBR, National Institute forStatistics, Ministry of PublicFinance




According to Article 51 of Law No. 101/1998regarding the Statute of the NBR, the NBR isentitled to collect information from the banksthat are licensed by the NBR. These banksreport monetary data.

Law No. 101/1998 is available on the NBRwebsite at www.bnro.ro.


Statistical standards consist of the chart ofaccounts for the central bank, the chart ofaccounts for banks, and the IMF Manual onMonetary and Financial Statistics.



The economic territory of Romania isidentical to its geographic territory.


Romania

The following categories are considered asresidents:

a) Legal persons (enterprises):

• public institutions, autonomous regions,companies, associations, clubs, leaguesand any other profit-making or non-profit organisations with legalpersonality, registered or authorised tocarry on activities in Romania;

• individuals and family associationsauthorised according to the provisionsof Decree Law No. 54/1990 regardingthe organisation and development ofcertain economic activities based on freeenterprise, as amended;

• subsidiaries, branches, representations,agencies and offices of foreign legalpersons, registered and/or authorised tocarry on activities in Romania;

• embassies, consulates and otherrepresentations of Romania abroad;

• subsidiaries, branches, representationoffices, agencies and offices of Romanianfirms which carry on activities abroadbut which are not registered as legalpersons abroad.

Foreign branches of domestic banks areclassified as non-resident (foreign assets andforeign liabilities), whereas domestic branchesof foreign banks are classified as resident(domestic assets and domestic liabilities).

b) Individuals (natural persons):

• individuals, Romanian citizens, domiciledin Romania, as certified by an identitycard issued by the appropriateauthorities;

• individuals with other citizenship andindividuals with no citizenship (stateless),domiciled in Romania, as certified by anidentity card issued by the appropriateauthorities.



See Table 2.


Romania

Table 2

Sector classification1) Sectors Definitions

Money-creating sector Central bank The monetary authority.

Commercial banks A legal entity authorised to accept deposits and grant credits in its own name and on itsown account as its main business activity.

Savings and loans banks Commercial banks that accept deposits and grant credits to natural persons and smallcompanies.

Subsidiaries of A legal entity where another person or a group of persons acting jointly hold 50% orforeign banks more of the voting rights or a significant stake, allowing effective control to be

exercised over the management or policies of the subsidiary.

Branches of foreign banks Operational units of a bank without their own legal personality, directly carrying on allor some of the bank’s activities within the limits of the terms of reference stipulated bythe bank.

Credit unions and Legal associations of private entities that conduct banking operations.co-operatives

Money-holding sector Insurance companies Companies that provide financial benefits to clients in the event of a specific loss.

Mutual funds Institutions that operate through investment companies to raise money fromshareholders and to invest this money.

Financial leasing Companies that provide financing to borrowers for the purchase of assets.companies

Securities firms Companies that trade securities and futures contracts for their own and their customers’account.

Bureaux de change Entities that trade domestic currency for foreign currency.(foreign exchange offices)

Deposit Guarantee Fund An institution for the protection of household deposits.

Agency for the recovery A government agency which recovers the non-performing loans of major state-ownedof banking assets banks.

Non-financial Corporations that produce goods or non-financial services.corporations

Non-profit institutions Charitable organisations or associations of persons that are not profit-oriented.

Households Small groups of persons who share the same living accommodation and income.

Money-neutral sector General government The fiscal and economic authority.

Non-resident sector Foreign banks and Foreign entities engaged in significant economic activity in Romaniaothers (governments, for at least one year.international organisationsand institutions, embassies,foreign households andcorporations)

1 ) Romania has not yet implemented a monetary statistics sector classification


Romania

S22


Table 3




Central bank S121

Central bank


Commercial banks, savings and loans banks,subsidiaries of foreign banks, branches of foreignbanks, credit unions and co-operatives

S122


S12


Money-holdingsector

Mutual funds, financial investment companies,financial leasing companies

S123


and pension funds

Money-holdingsector

S124


S125


Non-financial corporations S11


Households S14

Households

Non-profit institutions S15


Money-neutralsector

Generalgovernment

Agency for the recoveryof banking assets

S1311


General government

Money-neutralsector

S1312

State government

Money-holdingsector

S1313

Local government

S1314


Non-residentsector

Non-resident sector S211

EUcountries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212


Securities firms, bureaux de change (foreignexchange offices), Deposit Guarantee Fund in theBanking System

Insurance companies

2.2.2.2 Comparison between sectors of the national economy and the ESA 95


Romania


National central bank(s) 1

Credit institutions 40Banks and branches of foreign banks 39Credit co-operative organisations 1


Total 41




According to the legal provisions in force, acredit institution is a legal person authorisedto accept deposits and other reimbursablefunds from the public and to grant loans in itsown name and on its own account. Thiscategory comprises banks, credit co-operativeorganisations and savings institutions financingthe housing sector. All credit institutions aresubject to the NBR’s authorisation, prudentialregulation and supervision.

2.3.2 Definition of other monetaryfinancial institutions

Not applicable.


Not applicable.


Banks obtain their funds from the public bymeans of the demand and time deposits ofeconomic agents (in national currency –ROL); household savings (demand and time);

residents’ foreign exchange deposits (demandand time); and certificate deposits.



Balance sheet of the NBR:

• Foreign assets (gold; convertiblecurrencies: gross claims on non-residentsincluding holdings of SDRs and foreignexchange, deposits at foreign banks,Treasury bills, other foreign assets) anddomestic assets (vault cash, credit togovernment, interbank assets, otherdomestic assets).

• Foreign liabilities (deposits of foreignbanks, loans from foreign banks, SDRpurchases from the IMF, other foreignliabilities) and domestic liabilities(currency issue, government deposits,interbank liabilities, capital accounts,other domestic liabilities).

Aggregate balance sheet of banks:

• Foreign assets (cash, deposits withforeign banks, stakes in foreign banks,foreign securities, other foreign assets)and domestic liabilities (credits to non-government, credits to government,interbank assets, other domestic assets).

• Foreign liabilities (borrowings fromforeign banks, deposits of foreign banks)and domestic liabilities (domestic clients’deposits, government deposits, interbankliabilities, capital accounts, otherdomestic liabilities).


Romania

Box 1

M0 includes

– currency outside the central bank

– commercial banks’ current accounts with

central bank currency in issue

M1 includes

– currency outside banks

– demand deposits

Quasi-money includes

– household savings

– time deposits

– restricted deposits

– certificates of deposit

– foreign currency deposits of residents

M2 includes

– M1

– Quasi-money


Assets

• Domestic credit

– credit to government, net

– credit to non-government

in ROLshort termmedium and long term

in convertible currenciesshort termmedium and long term

Liabilities

• Demand and time deposits in ROL

• Household savings

– demand deposits

– time deposits

• Residents’ foreign exchange deposits(demand and time)


2.6.1 Definition of money and breakdownof monetary aggregates byinstrument

See Box 1.


The transferable instruments included in themonetary survey comprise, inter alia, cashand certificates of deposit. An accurate sectorbreakdown of transferable instrumentscannot be derived for banking statisticspurposes.


See Box 2.

2.8 Reserve money

Reserve money includes currency outside thecentral bank and commercial banks’ currentaccounts with the central bank.


Romania

Box 2

Net foreign assets

Gold

Convertible currencies, net

Net domestic assets

Domestic credit

– credit to government, net (General Account

of State Treasury, other credits to government:

government securities in ROL and in foreign

currencies, and other extra-budgetary funds)

– credit to non-government

in ROL

in convertible currencies

Other items, net



agents all the institutions)



Banks and branches of foreign banks 39 100 59.9

Credit co-operative organisations 1 100 Not yet collected

Other monetary financial institutions - - -

Total 41 100




The NBR collects primary data fromcommercial banks for monetary statisticspurposes pursuant to Law No. 101/1998regarding the Statute of the NBR and LawNo. 58/1998 (the Banking Act).

Money and banking and other financialstatistics are compiled by the StatisticsDepartment. The methodology underlyingmonetary statistics is based on the IMF’sManual on Monetary and Financial Statisticsand the Guide on Monetary and BankingStatistics.


See Table 5.


Banks report their data (full balance sheet)on hard copy and through the interbankcommunications network to the NBR’sStatistics Department. Regulations specifythat the commercial banks should transmitthe requested data between the 15th and20th day of the month following the reportingdate. The accounts of the banks aremaintained as stock data in millions of ROL.


Romania


The accounts of the NBR are maintained asstock data in millions of ROL. After havingreceived the balance sheet of the NBR fromthe Accounting Department between the15th and 20th of the month following thereference month, the Statistics Departmentneeds three days to produce the analyticalaccounts for the central bank. Thecompilation of the analytical accounts withinone month is deemed timely.



Data provided by banks are end-of-perioddata.

2.10.2 Revisions

Data may be subject to revisions afterpublication, mainly due to updating needs.No specific rules are applied. Explanatorynotes for revised data are inserted into thepublication.


Not applicable.


Techniques for the seasonal adjustment ofdata are not used.

2.11 Publications

2.11.1 First release of data (includingmeans of distribution)

Relevant publications for monetary statistics:

• Annual report, NBR;

• Monthly Bulletin, NBR;

• Macroeconomic Indicators, NBR;

• National Accounts;

• Balance of payments and internationalinvestment position (i.i.p.);

• The Internet (NBR website).

The following statistics are published on amonthly basis in the Monthly Bulletin of theNBR: balance sheet of the NBR, aggregatebalance sheet of banks, consolidatedmonetary survey, reserve money, broadmoney, domestic credit, interest rates appliedby the NBR and by banks. The MonthlyBulletin also includes: money marketindicators, interbank foreign exchangemarket, capital market, the b.o.p., the i.i.p.,main macroeconomic indicators, consumerprices and industrial producer prices. Thedata are published in more detail in the NBR’sAnnual Report.

Provisional data in the NBR Bulletin may berevised in the following month’s edition.


Same as for first publication.


No relevant publications other than thoselisted in Section 2.11.1.


Romania

3 Contacts at the National Bank of Romania


Statistics Department/Statistical Analysis andInformation Division

National Bank of Romania25, Lipscani StreetTelephone: 004021-315-2836Fax: 004021-312-7193E-mail: [email protected]

251ECB • M

oney, Banking and Financial Market Statistics in the Accession Countries – Volum

e I • May 2003

Ro

man

ia

An

nex 1

Organisation Chart of the National Bank of Romania – as of 1 December 2002

M o n e t a r y P o l i c y C o m m i t t e e S u p e r v i s i o n C o m m i t t e e

Monetary Analysis Division

Monetary Forecasting Division

MONETARY POLICY DEPARTMENT

EU Integration Division

International Relations Division

INTERNATIONAL RELATIONS AND EU INTEGRATION DEPT.

Research Division

Publications Division

Documentation and Library Division

RESEARCH AND PUBLICATIONS DEPARTMENT

Statistical Reporting Division

Data Processing Division

Statistical Analysis and Information Division

STATISTICS DEPARTMENT

IT Systems Division

Network Administration Division

IT DEPARTMENT

VICE - GOVERNOR

Monetary Policy Operations Division

State Treasury Operations Division

Foreign Reserve Management Division

MARKET OPERATIONS DEPARTMENT

Issuance Division

Market Operations Division

Settlements Division

BANK OPERATIONS DEPARTMENT

Financial Division

Accounting Division

Internal Financial Audit Division

ACCOUNTING DEPARTMENT

FIRST VICE-GOVERNOR

Analysis and Strategy Division

Prudential and Payment System Regulation Division

Licensing Division

Banking Risk Division

Accounting and Currency Regulation Division

BANKING REGULATION AND LICENSING DEPARTMENT

Synthesis Division

Inspection Division I

Inspection Division II

Inspection Division III

SUPERVISION DEPARTMENT

Legislation, Authorisation, and Legal

Documentation Division

Contract Assistance and Disputed Claims Division

LEGAL DEPARTMENT

VICE - GOVERNOR

General Audit Division

IT Audit and Synthesis Division

INTERNAL AUDIT DEPARTMENT

Human Resources Management Division

Professional Training Division

HUMAN RESOURCES DEPARTMENT

Secretariat of the Board of Administration Division

Chancellery and Branch Coordination Division

Protocol Division

Banking Correspondence Division

Bank Archives and Museum Division

Public Information and Relations with Media Division

SECRETARIAT

Investment and Procurement Division

Transport Division

General Administration Division

Technical Services and Maintenance Division

Bank Security Division

Social Services Division

LOGISTICS DEPARTMENT

B R A N C H E S

G O V E R N O R

B O A R D O F D I R E C T O R S


Romania

Annex 2

Organisation chart of the Statistics Department of the NBR

Director

Deputy Director

Statistical

Analysis and

Information

Division

Data

Processing

Division

Statistical

Reporting

Division

Slovakia


Slovakia




Coll. Collection of laws


FMA Financial Market Authority

GDP gross domestic product



NBS Národná banka Slovenska – National Bank of Slovakia


SKK Slovak koruna

SOSR Statistical Office of the Slovak Republic

SR Slovak Republic


Slovakia




The National Bank of Slovakia (NBS) consistsof a head office in Bratislava, as well as branchoffices and special organisational units. Theheadquarters is divided into the Governor’soffice, Audit Department and eight Divisions.Each Division is further divided intoDepartments and Sections.

See Annex 1.


Statistical work in the NBS is concentrated inthe Statistics Department, which is a part ofthe Monetary Division. The StatisticsDepartment is further divided into foursections: Non-bank Statistics, BankingStatistics, Foreign Exchange Statistics andStatistics for International Institutions. Thereis also the Balance of Payments Section, whichis a part of the Monetary Policy Department.

See Annex 2.


• The NBS Act

Act of the National Council of the SR No.566/1992 Coll. dated 18 November 1992 onthe National Bank of Slovakia, as amended byAct No. 26/1993 Coll., Act No. 159/1993Coll., Act No. 249/1994 Coll., Act No. 374/1994 Coll., Act No. 202/1995 Coll., ActNo. 118/1996 Coll., Act No. 386/1996 Coll.,Act No. 348/1999 Coll., and Act No. 149/2001 Coll.

• The Banking Act

• Act No. 483/2001 Coll. dated 5 October2001 on Banks and on amendments tocertain laws.

• The Act of the National Council of theSlovak Republic (SR) No. 118/1996 Coll.dated 20 March 1996 on the protection ofbank deposits with amendments to relatedlaws as laid down by Act No. 154/1999Coll., Act No. 397/2001 Coll. and Act No.492/2001 Coll.

• The Act of the National Council of theSlovak Republic No. 566/2001 Coll. dated9 November 2001 on securities andinvestment services and on amendmentsto certain laws.

• The Foreign Exchange Act of the NationalCouncil of the SR No. 202/1995 Coll. dated20 September 1995 which amends andaugments Act No. 372/1990 Coll. oninfringements as amended by laterregulations including Act No. 45/1998Coll., Act No. 200/1998 Coll., Act No.388/1999 Coll., Act No. 367/2000 Coll.and Act No. 442/2000 Coll.

• Act No. 456/2002 Coll. dated 25 June2002, which amends and augments theForeign Exchange Act.

• The Act of the Slovak National CouncilNo. 310/1992 Coll. dated 6 May 1992 onHome Savings as amended by Act No. 386/1996 Coll., Act No. 242/1999 Coll. andAct No. 443/2000 Coll.

• Regulation of the Ministry of Finance ofthe SR and the National Bank of SlovakiaNo. 390/1999 Coll. dated 21 December1999 implementing certain provisions ofthe Foreign Exchange Act.


Slovakia

• Act No. 431/2002 dated 18 June 2002 onaccounting, valid since 1 January 2003. Untilthis date, Act No. 563/1991 dated12 December 1991 on accounting was valid.

• Act No. 432/2002 dated 18 June 2002,which amends and augments Act No. 385/1999 Coll. on Collective Investment.

Selected decrees of the NBS:

• Decree of the NBS No. 3/1995 dated3 March 1995 on the Rules for EvaluatingBank Claims and Off-balance SheetLiabilities in Terms of Risk Exposure andfor Reserving Funds as Provision againstsuch Risks.

• Decree of the NBS No. 2/2000 dated14 February 2000 on the Capital Adequacyof Banks as amended by Decree No.8/2001 dated 25 May 2001.

• Decree of the NBS No. 5/2000 dated14 February 2000 on the Limitations onOpen Foreign Exchange Positions of Banksas amended by Decree No. 1/2001 dated22 December 2000.

• Decree of the NBS No. 3/2001 dated22 December 2000 on disclosure ofinformation by banks and branch offices offoreign banks.

• Decree of the NBS No. 10/2001 dated25 May 2001 concerning the reporting ofinformation by banks and branches of foreignbanks to the National Bank of Slovakia.

• Decree of the NBS No. 14/2002 dated12 December 2002 on the submission ofreports by banks and branches of foreignbanks to the National Bank of Slovakia.

• Decree of the NBS No. 12/2001 dated21 December 2001 stipulating the requisitecriteria for an application for authorisationto operate as a bank.

• Decree of the NBS No. 13/2001 dated21 December 2001 stipulating the requisite

criteria for an application for a bankinglicence by a foreign bank wishing toundertake banking activities at a branch inthe SR.

• Decree of the NBS No. 18/2001 dated21 December 2001 specifying theprescribed content of a detailed audit reportfor banks and branches of foreign banks.

• Decree of the NBS No. 2/2002 dated26 July 2002 on the Liquidity Rules forBanks and Branch Offices of Foreign Banks.

Most of these regulatory texts can be foundon the NBS’s website at www.nbs.sk.




The NBS Act establishes the NBS and definesits role and function:

(1) The NBS is established as theindependent central bank and bank ofissue of the Slovak Republic;

(2) the NBS is a legal person not registeredin the Corporate Register, with itsheadquarters in Bratislava;

(3) the NBS has the authority to issuegenerally binding regulations within thelimits prescribed by the NBS Act orspecial regulations; and

(4) the position of the NBS in handling itsown property is the same as that of aprivate business in dealings concerningrights of ownership.


The primary objective of the NBS is tomaintain price stability. To this end, the NBS:


Slovakia

a) determines monetary policy;

b) issues banknotes and coins;

c) controls the circulation of money, co-ordinates payments and settlementbetween banks, and ensures the efficientand economical conduct of theseoperations;

d) supervises the safe functioning of thebanking system and conduct of bankingactivities pursuant to this Act and specialregulations; and

e) performs other activities pursuant to theNBS Act.

The NBS:

a) is required to submit a half-yearly reporton monetary developments to the SlovakNational Council;

b) is required to publish informationconcerning monetary developments atleast once every three months;

c) represents the SR in international financialinstitutions and ensures theimplementation of tasks arising from thisrepresentation; and

d) represents the SR in activities on worldfinancial markets.

Supervision performed by the NBS

The NBS ensures the safe functioning of thebanking system and banks, the DepositProtection Fund, and other entities/groups ofentities, where required by a special law.

Banking supervision includes:

a) assessment of applications for bankinglicences pursuant to separate regulation;

b) verification of fulfilment of the conditionsneeded to obtain a banking licence, as wellas licences granted under separateregulations; and

c) verification of compliance with regulationsissued by the NBS and obligations imposedby law.

Relationship with the Government:

While respecting its primary objective, theNBS supports the economic policy of theGovernment.

The NBS fulfils its tasks pursuant to Article 2of this Act independently of governmentinstructions.

The Governor, or a member of the BankBoard elected by the Governor, informs theGovernment of the resolutions of the BankBoard and its conclusions.

The NBS gives its opinion on proposalssubmitted to the Government forconsideration concerning the scope ofactivities of the NBS.

The NBS serves the Government in anadvisory capacity on matters within the scopeof its authority.

The Governor of the NBS or, during his orher absence, a Vice-Governor elected by theGovernor, has the right to participate inmeetings of the Government. The Governoris not a member of the Government.

Operations with Banks

The NBS is entitled to conclude and conductwith banks, foreign banks, and other financialinstitutions all types of banking operations inaccordance with the provisions of the NBS Act.


Slovakia

The NBS may purchase from or sell to banks:

a) bills of exchange maturing within sixmonths from the date of their purchase bythe NBS, bearing at least two signatures ofwhich at least one signature is made onbehalf of a bank;

b) Government bonds, or other securitiesguaranteed by the Government, which it mayhold for a maximum period of one year.

Operations with the SR

The NBS keeps the revenue and expenditureaccounts of the State budget, the records ofState financial assets and liabilities and of Statespecial-purpose funds, and other accounts ofState budget-funded organisations. The NBSmay only make payments from its accounts.

The NBS places government bonds inagreement with the Ministry of Finance (MoF).



The NBS is responsible for the compilationof statistics in the areas of the reserve base(Banking Transactions Department), thebalance of payments (Balance of PaymentsSection) and prudential supervision (BankingSupervision Division).

The agency responsible for compiling balanceof payments (b.o.p.) data is the NBS’s Balanceof Payments Section, which has beencompiling monthly, cumulative b.o.p. statisticsfor the SR since 1993. The monthly b.o.p.(standard presentation) of the SR is publishedin the regular reports of the NBS which aresubmitted twice a year to the SlovakParliament. The b.o.p. data are alsodisseminated monthly to the public via theNBS’s website.

The main task of the Non-bank StatisticsSection is to collect returns from legalentities, individuals and businesses, with theexception of banks and branch offices offoreign banks, detailing their cross-bordertransactions and foreign assets and liabilities.The reporting of transactions betweenresidents and non-residents is based on directreporting by companies. A summary of thedata concerning the foreign assets andliabilities of the corporate sector is one ofthe inputs used to compile the b.o.p. Thesection compiles and analyses data on foreigndirect investment within the scope of thecapital and financial accounts of the b.o.p., aswell as on inflows and outflows of equitycapital and reinvested earnings into/from theSR.


Statistical Office of the Slovak Republic (SOSR)

In accordance with the Act on officialstatistics, the SOSR performs the followingtasks:

a) it elaborates the policy principles for theofficial statistics of the SR and theProgramme of Statistical Surveys;

b) it defines methodology in the field ofofficial statistics;

c) it organises and conducts surveys, andcollects and processes statistical data;

d) it ensures comparability of statisticalinformation from an international point ofview to enable an assessment ofdevelopments in the SR;

e) in co-operation with the competent centralgovernmental bodies, it prepares statisticalclassifications, nomenclatures and registers;


Slovakia

f) it proposes the method for producingidentification numbers for reporting units,and directs their allocation and notificationto these units;

g) it defines appropriate data collection andprocessing methodologies;

h) it provides the public with regularinformation on the state of the economy;and

i) it conducts public opinion research onactual social phenomena.

The SOSR provides information on the grossdomestic product (GDP), consumer prices(of goods and services), producer prices,inflation (the monthly, annual and averageannual rates), unemployment and foreigntrade.

The Ministry of Finance

The task of the MoF is to accomplish thestrategic aims of the Government’s financialand economic policy. In its capacity as a Stateadministrative authority, it manages andadministers fiscal, price, tax and tariff policy.

The MoF carries out state competencies inbanking, insurance and capital market matters.Its competencies also include foreignexchange policy.

The MoF and the NBS co-ordinate theiractivities to provide the Slovak financialmarket with invaluable information. Theyconstitute an integrated institutional,legislative and regulatory framework for themoney and capital markets.

The Financial Market Section covers thebanking and insurance industries, collectiveinvestment activities and securities broking,and capital markets.

The Treasury Section covers accountingmethodology and issues related to the chartof accounts and accounting procedures forbanks.

Financial Market Authority (FMA)

The FMA is responsible for:

a) state supervision of the capital marketsand insurance sector,

b) making decisions regarding the rights,legally-protected interests and duties oflegal and natural persons in the field of thecapital markets and insurance sector,

c) keeping and publishing the list of entitieslicensed by the FMA,

d) co-operating with the MoF in the area offinancial policy formulation andimplementation.

In this particular area, the FMA contributesto:

• the analyses of capital markets and theinsurance sector

• the preparation of plans for thedevelopment of the above, and

• the preparation of generally-bindingregulations on the above.

e) co-operation with other countries’supervisory bodies in the field of capitalmarkets and the insurance sector.


Slovakia

1.3.2.3 An overview of statistical data collection and compilation

Table 1



and counterparts

Collected data

Collecting agents

Description Data are transmitted,collected and compiledvia the “Status”electronic network.

NBS NBS

Data are transmitted, collectedand compiled via the “Status”electronic network.

Data are transmitted, collected and compiled via the“Status” electronic network.

Users

1. Assets and liabilitiesstatement of credit institutions(CIs) in SKK and foreigncurrency.

Balance sheet report ofthe NBS.

Statements of credits.

Statement of deposits.

Report on securities heldby CIs.

2. Balance sheet (stocks)– NBS, CIs (Regulation ECB/13/2001, Table 1)

Report on average interest rates on credits and newcredits granted in the actual month in SKK.

Report on average interest rates on deposits and newdeposits (Regulation ECB/18/2001; partially).

Report on interbank credits and deposits. Financialmarket interest rates.

Money market papers(State Treasury bills,NBS bills, Certificatesof Deposits).

Capital market papers(shares, bonds).

Investment securities.

NBS (from CIs,registration of StateTreasury bills, NBSbills), Securities Centreof Slovakia (registrationof book-entry, changes inownership).

1. NBS, CIs, SOSR, MoF, IMF,OECD.2. IMF, ECB.

NBS,CIs, SOSR, MoF, IMF, ECB, Eurostat.

NBS, SOSR, MoF,Eurostat.


Slovakia

Table 1 (continued)


Collected data

Collectingagents

Users

The Banking StatisticsSection of the NBS

SOSRDatacentrumNBSMoF

NBS NBS

The BankingTransactions Sectionof the NBS

NBSSOSRMoFEurostatOECD

NBSSOSRCIs

NBS

From regular reportsfrom CIs:

• non-term and termdeposits in SKKand foreigncurrency;

• promissory notes(of commercialbanks);

• securities issued byboth commercialbanks and non-banking customers;

• other depositstransferred tocustomer accounts(from interbankclearing accounts inconnection with thethree-day lag forsettlement ofpayments).

Foreign bank depositsin commercial banks(in SKK and foreigncurrency).

Yearly statements ofaccount/balancesheets:

a) statisticalstatements;

b) balance ofpayments;

c) internationalinvestment position;

d) banking andgovernmentstatistics.

1) Data on goods are based on trade statisticscompiled by the SOSR. The data are prepared bythe Customs Office on the basis of customsdeclarations. Data are valued at market pricesand recorded at the time of border crossing.

These data enable a territorial and commoditybreakdown of SR exports and imports.

2) Commercial banks:

• the monthly report “Foreign exchangeincome and payments”. The data are usedfor the compilation of the current account(services, income, current transfers);

• the quarterly report “Foreign exchangeincomes and payments – geographicalbreakdown”;

• the monthly report “Foreign exchangeposition”. The data are used for thecompilation of the financial accounts.

Banking reports are collected and processedby the Statistics Department of the NBS.

3) Enterprises:

• the monthly report “Foreign assets andliabilities”. The stock and flow data areused for the compilation of the financialaccounts. Data are obtained from eachenterprise with foreign assets or liabilitiesexceeding SKK 1 million at the referencedate. Currently, data are collected fromabout 4,000 enterprises;

• the quarterly report “Direct investment –territorial and economic activitystructure”. In this report, the territorial andeconomic activity structure for directinvestment is given (for both stocks andflows).

Enterprise reports are collected and processedby the Statistics Department of the NBS.

4) Data from divisions of the NBS:

These data are mainly used to report changesin reserves.

Data from regularreports from CIs on:

a) Uncovered foreignexchange positions

b) Capital and reserves

c) Monthly liquidity

d) Capital adequacy

e) Credit exposure

f) Classification ofclaims andliabilities

g) Delayed claims


Slovakia

Description Data are transmitted,collected and compiledvia the “Status”electronic network.

Survey system (enterprises).

Foreign exchange records (Banking system).


Table 1 (continued)

The reserve base iscalculated as theaverage of collecteddeposits on threedates. For instance, thereserve base for Mayis calculated fromdeposits as reported on30 April, 10 May and20 May.

The automatedprocessing of the statestatistical surveyinvolves the followingactivities:

a) creation of a file forthe reporting units;

b) data collection andrecording;

c) automated errorchecking andcorrection;

d) data origination;

e) saving the file in thedatabase; and

f) further dataprocessing andproduction ofoutput tables.




• Regulation of the MoF of the SR No. 20/359/2002 dated 13 November 2002 on theaccounting system and accountingprocedures for banks, branch offices offoreign banks, the NBS, deposits securityfund, securities traders, branch offices offoreign securities traders, guarantyinvestment funds, asset managementcompanies, branch offices of foreign assetmanagement companies and mutual funds.

• Resolution of the NBS No. 1 dated 5 March1999 concerning minimum reserverequirements as amended by the resolutionNo. 4 dated 22 December and resolutionNo. 1 dated 25 May 2001.

• Regulation of the NBS No. 5 dated 10September 1999 stipulating the conditionsfor balance of payments co-ordination inthe SR.

• Resolution of the NBS No.3 dated 14December 2001 stipulating the conditionsfor the maintenance of minimum reservesby banks in 2002.

• Decree of the NBS No. 4/2002 on theaccounting system of the NBS.

• Decree of the SOSR No. 449/2000 dated8 December 2000 concerning theclassification of institutional sectors andsub-sectors (according to the ESA 95).


The following international statisticalstandards have been adopted for the conceptsand principles applied to all aspects ofmonetary statistics:

• The International Accounting Standards,renamed the International FinancialReporting Standards;

• A new sector classification consistent withthe ESA 95 was implemented in January 2002;


Slovakia

• the IMF Manual on Monetary and FinancialStatistics;

• the IMF Balance of Payments Manual (5thedition);

• Eurostat’s Balance of Payments Vade-mecum, February 2000.

• Regulation of the ECB No. 13/2001.

• Regulation of the ECB No. 18/2001.



For the purposes of monetary statistics,selected terms used in the Foreign ExchangeAct of the National Council of the SR No.202 dated 20 September 1995, as amendedby Act No. 442/2000 Coll. and Act No. 456/2002 Coll. are explained as follows:

a) “country” refers to the territory of theSR;

b) “residents” are legal persons permanentlybased in the country or natural persons

with permanent or long-term residence inthe country; an organisational unit of aresident based abroad is also consideredto be resident of the country and isregistered in the Corporate Register;

c) “non-residents” are legal or naturalpersons who are not resident in thecountry; a non-resident may also beunderstood as an organisational unit of anon-resident operating in the country, withthe exception of a branch office of a foreignbank (Article 5 of the Act No. 21/1992Coll. on banks) operating in the countryon the basis of a banking licence, in whichcase it has resident status.

Definitions of economic and geographicterritory are identical as in the ESA 95,paragraphs 2.04 to 2.06.



See Table 2.


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Table 2

Statistical classification Sectors Definitions

Money-creating sector S12 Financial corporations

S121 Central bank – in the SR, the NBS

S122 Other financial institutions

S12201 PublicS12202 PrivateS12203 Under foreign control

Money-holding sector S123 Other financial intermediaries

S12301 Financial leasing, investment fundsS12302 Investment companies

S124 Financial auxiliaries

S125 Insurance corporations and pension funds

S14 Households

S15 Non-profit institutions serving households

Money-neutral sector S13 Government

S1314 Social security fundsS1313 Local government/local authoritiesS1312 Regional governmentS1311 Central government

Non-resident sector S2 Rest of the world

S21 European Union (EU)

S211 EU countriesS212 Institutions of the EU

S22 Third countries and international institutions



Slovakia

S22


Table 3




NBS S121

Central bank


CIs S122


S12


Money-holdingsector

Financial institutions and corporations:

– public,– private,– under foreign control.

S123


and pension funds

S124


S125


S11


Households (small businesses)

Consumers

S14

Households

Non-profit institutions servinghouseholds

S15


Money-neutralsector

Generalgovernment

Centralgovernment

S1311


General government

Money-neutralsector

S1312

State government

Money-holdingsector

S1313

Local government

S1314


Non-residentsector

Non-resident sector S211

EU countries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212

Institutions ofthe EU

Insurance corporations:


Non-financial corporations:


Stategovernment

Localgovernment



Money-holdingsector


Slovakia



• The Banking Act No. 483/2001 Coll. onBanks and on amendments to certain laws.

In Part One – Basic Provisions:

(1) For the purposes of this Act, a bank isa legal entity with its registered office in theterritory of the Slovak Republic, founded as ajoint stock company, which:

a) accept deposits and

b) provides loans

and which holds a banking license toperform activities under a) and b) above. Anyother legal form of bank is prohibited.

(2) For the purposes of this Act:

a) a deposit means entrusted funds thatrepresent an obligation towards the depositorto repay them; and

b) a loan means funds temporarilyprovided in whatever form, including factoringand forfeiting.

(3) In addition to the activities specified inparagraph 1, a bank may carry out the following:

a) investments in securities for the bank’sown account

b) trading for the bank’s own or for theclient’s account

1. in financial instruments of the moneymarket, in Slovak koruna and foreigncurrencies, including exchange services,

2. in financial instruments of the capitalmarket, in Slovak koruna and foreigncurrencies.


Act No. 432/2002 dated 18 June 2002, whichamends and augments Act No. 385/1999 Coll.on Collective Investment, defines an assetmanagement company as a legal entity whosesubject of activity is the gathering of financialresources from the public on the basis of apublic offering for the purpose of theirinvestment into assets delimited by the Act,and to create and administer mutual funds ofgathered assets and to perform theadministration of mutual funds.

There are three types of mutual funds: open-end mutual funds, closed-end mutual funds,and special mutual funds.

Data on the money market funds (MMFs)satisfying the ECB definition are not includedin monetary statistics because their share ofassets is under 2% of the amount of depositsof the banking sector. The value and structureof assets, portfolio and rate of return arebeing investigated with the co-operative FMA.


Not applicable.


NBS 1

Credit institutions 22Universal banks 17Branch offices of foreign banks 2Housing savings banks 3


Total 23

Table 4As at end-December-2002


Slovakia


CIs’ general deposits consist of the following:overnight deposits, current accounts, termdeposits (deposits with agreed maturity,deposits redeemable at notice), certificatesof deposit, savings deposits.

Other banking products follow bankingactivities and services:

• credit products, such as short, mediumand long-term bank loans;

• currency trading and exchange services;

• granting of credits to private and corporatecustomers;

• consulting in the field of financialmanagement;

• financial leasing;

• investment in securities on the bank’s ownaccount;

• securities trading;

• safe deposit boxes;

• debit cards, credit cards, cheques andtravellers cheques;

• mortgage banking; and other;

• products of MMFs: shares/units.



For 2003, the NBS plans to collect balancesheet items in two ways:

1) The balance sheet items and off-balance-sheet items are divided into summary

accounts according to the chart of accounts,the annually updated accounting proceduresfrom banks, a special Regulation of the MoFof the SR (No. 431/2002, valid from 1 January2003) and the Regulations of the NBS andthe Banking Supervision Division (valid from1 January 2003).

The main asset items consist of: Cash items;Deposits and credits to the NBS, Foreign-issuing banks and postal banks; Deposits,credits and other claims to other banks;Claims in respect of securities and otheritems; Credits and other claims to clients;Accounts to public authorities and the funds;Holdings of securities; Fixed assets; Otherassets; and Total assets.

The main liability items are as follows:Deposits and credits to the NBS, foreign-issuing banks and postal banks; Deposits,credits and other claims to other banks;Liabilities in respect of securities and otheritems; Amounts owed to clients; Amountsowed to public authorities and the funds;Securities issued; Reserves; Share capital;Income for the previous years; Profit or lossin the process of approval (+/-); Otherliabilities; and Total liabilities.

2) The balance sheet comprises balance sheetitems in respect of the Regulation of the ECBof 22 November 2001 concerning theconsolidated balance sheet of the monetaryfinancial institutions sector (ECB/2001/13).

The main asset items are:

• Cash – containing holdings of Slovakkoruna and foreign banknotes and coins incirculation that are commonly used tomake payments.

• Claims – this consists of funds lent toborrowers. It includes assets in the formof:

– Loans,

– Deposits placed with other banks,


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– Bad debt loans,

– Holding of non-negotiable securities,

– Traded loans,

– Subordinated debt in the form ofdeposits or loans.

Claims under reverse repos:

• Securities other than shares – representsholdings of debt securities.

• MMF shares/units – includes holdings ofshares or units issued by money marketfunds.

• Shares and other equity – includes holdingsof securities which represent propertyrights in corporations.

• Fixed assets – consists of non-financialassets, tangible or intangible, which areused for more than one year.

• Remaining assets – includes financialderivative positions with gross positivemarket values, amounts receivable inrespect of suspense items and transit items,accrued interest receivable on loans,dividends to be received, claims not relatedto the main banking business.

The main liability items are:

– Deposits – broken down into:

– Overnight deposits,

– Deposits with agreed maturity,

– Deposits redeemable at notice,

– Repurchase agreements.

• MMF shares/units – represents shares orunits issued by money market funds.

• Debt securities issued – contains debtnegotiable securities issued by creditinstitutions.

• Capital and reserves – comprises theamounts arising from the issue of equitycapital to shareholders or otherproprietors. It includes:

– Equity capital,

– Non-distributed benefits or funds,

– Specific and general provisions againstloans, securities and other types of assets.

• Remaining liabilities – consists of financialderivative positions with gross negativemarket values, amounts payable in respectof suspense items and transit items,accrued interest payable on deposits,dividends to be paid, amounts payable notrelated to the main banking business,margin payments made under derivativecontracts, etc.

2.5.2 Breakdowns of the main balancesheet items by instrument/maturity,counterparty and currency

Instrument categories, maturity, sector(counterparties) and currency breakdownshave been compiled according to RegulationECB/13/2001 since January 2003.

Maturity of instrument categories: these fullycover the requirements of the ECBRegulation ECB/13/2001, Part 2, Table A.

Currency breakdown: split domestic (SKK),euro; other foreign currencies will beintroduced in January 2003. Sectorbreakdown: the ESA 95.

Counterparties: Regulation ECB/13/2001, Part2, Table A.


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See Box 1.

From January 2003 onwards, the NBS willstart to calculate monetary aggregates M1,M2 and M3 according to the ECB’s definition;these are also for internal use.

Box 1

Currency in circulation (M0) includes:

– Currency (banknotes and coins) outside banks.

Money (M1) includes:

– M0;

– Demand/sight deposits in national currency

only, broken down by households, enterprises

and insurance companies (residents and non-

residents).

Quasi-money (QM) includes:

– Term deposits in national currency, broken

down by households, enterprises and insurance

companies (residents and non-residents):

deposits with agreed maturity, savings deposits,

deposits not to be converted prior to maturity

and/or converted subject to a penalty;

– Deposits held in foreign currency for residents

(both sight and term deposits).

Money demand (M2) includes:

– M1;

– Quasi-money.


Not applicable.


See Box 2.

Box 2

Net foreign assets:

The official reserves of the NBS plus foreign assets of the banking sector minus foreign liabilities of the NBS,

the Government and the banking sector, minus State securities issued domestically held by non-residents.

Net domestic assets:

Lending to domestic non-banks (i.e. to general government, enterprises and households), minus other items

(net).

Credit to general government: claims of the domestic and foreign banking sectors on central government,

municipalities, social security funds and the National Property Fund (in the form of granted credits and

securities portfolios), minus liabilities to the same entities (mainly in the form of deposits).

Credit to households and enterprises (both resident and non-resident) in domestic and foreign currency.

Other items (net):

The difference between other liabilities and other assets in the banking sector balance sheets (for example,

payment system accounts, accounts of central banks, accounts of other banks, reserves, capital, provisions,

securities issued by the non-banking and non-government sectors, etc.).


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2.8 Reserve money

Monetary base = issued currency + banks’reserves (required and excess).

Reserve money = currency in circulation +reserves + bills of the NBS in portfolios ofcommercial banks.



The legal power to collect statistics isestablished by Part Seven (“BusinessDocumentation”) of the Banking Act No. 483/2001 Coll. on Banks, and by amendments tocertain laws:

Article 42: Banks and branch offices offoreign banks shall be obliged to produce andpresent to the NBS returns, notifications andother reports within specified deadlines; thecontent, form, arrangement, deadlines,method, and pace of their presentation shallbe stipulated by the NBS in a decreepromulgated in the Collection of Laws. Dataand other information on returns,notifications and other reports must becomprehensible, easy to follow, supportable,give a true and fair picture of reported facts,and must be presented in a set time. When



all institutions)

NBS 1 100 28.2


Universal commercial banks 17 100 60.7

Branch offices of foreign banks 2 100 7.5

Housing savings banks 3 100 3.6


Total 23 - 100


presented returns, notifications and otherreports fail to comply with the prescribedmethodology, or when reasonable doubtsarise as to their correctness or completeness,banks and branch offices of foreign banksshall be obliged upon request to provide theNBS with supporting material and explanationwithin a set deadline.


See Table 5.


• Reporting population: banking sector (CIs).

• Data collected (statements):

– by the Banking Statistics Section:

– Full balance sheet (monthly);

– Profit and loss account (monthly);

– Statement of credits (monthly);

– Report on deposits (monthly);

– Survey of assets and liabilities (everyten days);


Slovakia

– Report on average interest rates oncredits and new credits (monthly);

– Report on average interest rates ondeposits and new deposits (monthly);

– Report on securities held by banks(monthly);

– Report on interbank credits anddeposits (monthly);

– Report on transactions on non-residents’ accounts in SKK (monthly);

– Report on interest costs and revenues(quarterly);

– Report on turnover on the interbankmoney market (every ten days);

– Report on credits/deposits – structureby branch classification of economicactivities in time (annually);

– Report on credits /deposits – structureby economic sector in regions(annually).

– by the Foreign Exchange Statistics Section:

– Report on foreign exchangetransactions in convertible currency(monthly);

– Report on foreign exchangetransactions – structure by territory(quarterly);

– Report on foreign exchangetransactions – structure by currency(quarterly);

– Report on the foreign exchangeposition (daily);

– Report on foreign exchange creditsprovided to customers – structure byeconomic sector in convertiblecurrency (monthly);

– Report on foreign exchangetransactions on non-resident accountsin convertible currency (monthly);

– Report on foreign exchange depositsof customers – structure by economicsector in convertible currency(quarterly);

– Report on foreign exchange credits anddeposits of customers – structure bycurrency (biannually);

– Report on foreign exchange creditsprovided to customers – structure bybranch classification of economicactivities in convertible currency(annually);

– Report on foreign exchange creditsprovided to customers – structure byregions (annually);

– Report on foreign exchange depositsfrom and credits to customers –structure by branch classification ofeconomic activities in convertiblecurrency (annually);

– Report on foreign exchange depositsfrom and credits to customers –structure by regions in convertiblecurrency (annually);

– Report on external transactions in SKK(monthly);

– Report on off-balance-sheet securities(monthly);

– List of deals on interbank foreignexchange market (every ten days).

• Timeliness: the deadline for delivery ofmonthly reports is the 15th calendar dayfollowing the end of the reference month.Checking, processing and first releaseoccur between the 15th and 20th calendarday.


Slovakia

• Medium: electronically via the bankingstatistics system “Status”.

• The methodological rules are provided bythe Statistics Department of the NBS,while the accounting rules are supplied bythe MoF.


Data collected:

1. the balance sheet of the NBS, derived fromthe NBS’s accounting system:

– Frequency: daily, every ten days, andmonthly.

– Medium: in electronic form.

– Methodological and accounting rulessupplied by the MoF and the NBS.

2. the balance sheet of the NBS (RegulationECB/13/2001, Table 1), since January 2003.

– Frequency: monthly.

– Medium: in electronic form.



The Statistics Department compiles (end-of-period) stock data and calculates differencesin stocks.

2.10.2 Revisions

End-of-year data from December and openingdata as at 1 January are revised every year.

The published data are considered“preliminary” until the subsequent publicationof definitive data. The revised data are

published as “definitive data” during April.The deadline for banks to deliver thedefinitive data is 31 March in accordance withthe Decree of the NBS No. 11/2001 dated 14December, 2001 on submitting of reports bybanks and branches of foreign banks to besubmitted to the NBS. The data are revisedon the basis of audits. Any other changes areimplemented by the NBS in the month afterthe statistical treatment of the data.


The statistical returns system is based on thecomplete statistical survey and its accuracydepends on that of the accounting system.The breaks in time series and importantchanges in the reporting population areanalysed and described for data users withinthe NBS.

Guidelines for reclassification: can be found inPart Two of NBS Decree No. 3 dated 3March 1995, which lays down the rules forthe evaluation of bank claims and off-balance-sheet liabilities in terms of risk exposure, andfor the earmarking of funds to mitigate againstsuch risks (under Classification of Claims andOff-Balance-Sheet Liabilities).

• Information

Revaluation adjustments is contained in theRegulation of the MoF of the SR No. 65/355/1996, along with Annexes Nos. 3171/1997,4299/1997 and 18031/1999 on the chart ofaccounts and accounting procedures forbanks, valid from 1 January 2000 (revaluationof securities at market prices).

The Resolution of the Government of the SRNo. 908 dated 21 October 1999 determinedthe banking sector’s restructuring, and laiddown the rules governing the writing-off ofclaims by the restructured banks.

Methodological aspects for data collection forthe derivation of flows will be prepared duringthe first half of 2003.


Slovakia


The Statistics for International InstitutionsSection has started to produce seasonallyadjusted time series of currency in circulationand overnight deposits, at present purely forinternal use.

Because of the insufficient length of existingtime series, we applied a multiplicativeseasonal decomposition method for each oneto separate these time series into trend-cycle,seasonal, and random components. Toseparate trend cycle components, we applieda method using centred moving averages witha length of 12. Another benefit of seasonaldecomposition is its simplicity.

Regular publishing of such data and the use ofa higher-quality tool (TRAMO & SEATS orX-12-ARIMA) are planned for 2003.

2.11 Publications


The monthly data are first disseminatedwithin the NBS for internal use up to the25th calendar day following the end of thereference month via “Status”, the banks’electronic banking statistics system.

The public is informed within one month ofthe end of the reference month, when thedata are posted on the NBS’s website(www.nbs.sk). The public is informed of thispractice by a note in the NBS’s monthly“Monetary Survey” publication.

The data are also available on the NBS’swebsite in accordance with the SDDS datacategories.


• Assets and liabilities in SKK and foreigncurrency (monthly, confidential and inshortened form).

• Refinancing and the redistribution of credit:

– Time of publication: on the 25thcalendar day following the end of thereference month,

– Medium: electronic form, the NBS’swebsite.

• Credits and deposits of commercial banksin SKK and foreign currency (monthly,annually).

• Time series of assets and liabilities in SKKand foreign currency (quarterly).

• Foreign exchange position (monthly):complete version, shortened form, andindividually.

• External transactions in SKK (monthly):

– Time of publication: for monthlypublications, up to 35 days after thedeadline for data collection.

– Format: report.

– Medium: electronic form.

• The Monetary Survey (monthly bulletin):

– Time of publication: within one monthof the end of the reference month.

– Medium: the NBS’s website, hard copy.


Slovakia


Quarterly publications:

• Survey of financial sector developments:

– Time of publication: on the 25thcalendar day following the end of thereference month.

– Medium: electronic form, the NBS’swebsite.

The Annual Report:

– Time of publication: within one monthof the end of the reference month.

– Medium: the NBS’s website, hard copy.

3 Contacts at the National Bank of Slovakia


Section of Statistics for InternationalInstitutions

Statistics DepartmentNational Bank of SlovakiaImricha Karvasa 1813 25 BratislavaSlovakiaTel.: +421-2-57872690

+421-2-57872179+421-2-57872691+421-2-57872682

Fax.: +421-2-57871166E-mail: [email protected]

[email protected][email protected][email protected]


Slovakia

Annex 1

Organisation chart of the National Bank of Slovakia (NBS)

*

Governor

Executive Division

Governor’s Office

Audit Department

Vice-Governor Vice-Governor

Banking Supervision Division

Currency Division

Premises Division

Financial Management and Payment System Division

Branch Office Bratislava

Branch Office Banska

Branch Office Kosice

Monetary Division

Trade and Foreign Exchange Division

Information Systems

Institute of Monetary and Financial Studies *

* Independent Department


Slovakia

Organisation chart of statistical work at the NBS

Monetary Policy Department

Non-bank Statistics Section

Monetary Division

Statistics Department

Banking Statistics Section

Foreign Exchange Statistics Section

Statistics for International Institutions Section

Monetary Policy Section

Monetary Analyses Section

National Economy Section

Balance of Payments Section

Public Finance Section

Forecasting and Modelling Section

Annex 2

Slovenia


Slovenia


AJPES Agency of the Republic of Slovenia for Public Legal Records and Related Services

ATVP Securities Market Agency

AZN Authority for Insurance Supervision



BS Bank of Slovenia


HKS savings and loan undertaking



KDD Central Securities Clearing Corporation

MF Ministry of Finance

MFI Monetary financial institution

NPISHs non-profit institutions serving households

SIT Slovene tolar

SURS Statistical Office of the Republic of Slovenia


Slovenia




See Annex 1.

The basic organisation chart reflects thefunctions performed by the Banka Slovenije –the Bank of Slovenia (BS) – as an independentcentral bank. The competence of the BSincludes banking supervision functions.


See Annex 2.

The Financial Statistics Department is incharge of statistical data collection and thecompilation of statistical information,primarily in the field of balance of payments,financial accounts and monetary statistics.


• Law on the Bank of Slovenia, Official GazetteNo. 58/2002, 4 July 2002

The law on the central bank, whichcontains articles explicitly authorising thecentral bank to collect and process data,related to the performance of functionsunder this as well as other laws. It alsoincludes articles on the proposed accessionof the Republic of Slovenia to the EuropeanUnion and the introduction of the euro asthe monetary unit of the Republic ofSlovenia.

h t t p : / / w w w . b s i . s i / h t m l / e n g / l a w s _regulations/zbs1_ang.pdf (English)

• Law on Banking, Official Gazette No. 7/1999,5 February 1999 and Act on the Amendmentsand Additions to the Banking Act, OfficialGazette No 59/2001, 19 July 2001

The national banking law, which regulatesthe conditions for the establishment,operation, supervision and winding-up ofbanks and savings banks. It includesprovisions on regular monthly reportingby banks to the central bank.

www.sigov.si/mf/angl/zakon/bank_law.htm(English)

• The Foreign Exchange Act, Official GazetteNo. 23/1999, 8 April 1999

An Act that regulates: (i) transactionsbetween residents and non-residentsinvolving domestic or foreign means ofpayment, (ii) transactions between residentsinvolving foreign means of payment ortransactions whose object is the foreignmeans of payment themselves, and (iii)unilateral transfers of assets to or from theRepublic of Slovenia which do not representtransactions between residents and non-residents.

www.sigov.si/mf/angl/zakon/zdpangl.htm(English)

• The Securities Market Act, Official GazetteNo. 56 /1999, 13 July 1999

This act regulates the national securitiesmarket. It covers specific responsibilitiesrelating to banks’ activities in securitiestrading, bankruptcy, guaranteed claims ofinvestors, supervision tasks as well as theacquisition of data and information onsecurities trading.

www.sigov.si/mf/angl/zakon/ztvpan.htm(English)


Slovenia




The Bank of Slovenia is primarily responsiblefor maintaining price stability, and within thistask supports general economic policy withthe aim of economic stability. The BS isindependent in carrying out the duties andresponsibilities deriving from the Law of theBank of Slovenia. Furthermore, the BS:

• issues banknotes and puts them and coinsinto circulation,

• conducts monetary policy,

• supervises banks and savings banks, and

• performs other tasks, including managingthe information system required tosupport all the other functions.


Pursuant to Article 152 of the Constitutionof the Republic of Slovenia, the Bank ofSlovenia is independent and directlyresponsible to Parliament.

By supervising banks and savings institutions,the BS determines, enforces and controls thesystem of rules to ensure the safe functioningof banks and savings banks.

The budgetary funds of the centralgovernment are deposited with the BS, whichalso conducts other transactions for theaccount of the central government, asspecified by law.

The BS may not grant overdrafts and otherloans and guaranties to the bodies of theRepublic of Slovenia, the European Union orits Member States and their regional, localbodies and other public entities. Theexceptions to this rule are:

• granting overdrafts and other loans tobanks, savings banks and other financialinstitutions which are owned by theGovernment,

• financing the liabilities of the Republic ofSlovenia to the International MonetaryFund,

• financing the issuing of coins not exceedingthe 10% of coins in circulation, and

• intra-day bridging loans granted in favourof the public sector provided that noextension to the following day is possible.



The Financial Statistics Department isresponsible for three main macroeconomicstatistical systems: balance of payments(including the international investment positionand external debt), financial accounts andmonetary statistics, which are all undergoingmajor changes. The external debt statistics arebeing adjusted to the new IMF standard, whiledirect reporting data sources are beingstrengthened in the international investmentposition and balance of payments statistics. Thequarterly financial accounts have beengradually developing since the responsibilityfor this statistical field was transferred to theBS. In monetary and banking statistics, a gradualadjustment to the ECB requirements is takingplace in monetary financial institution (MFI)balance sheet and interest rates statistics. Atthe same time the central banking operationsdepartment is changing its current requiredreserve system and moving towards aminimum reserves system.

The Banking Supervision Department collectsdata for the purpose of prudential supervisionin line with European banking directives and


Slovenia

the guidelines of the Basel Committee onBanking Supervision.

The BS sends statistical information tonational and international users such as theECB, Eurostat and the IMF, and publishessuch information on hard copy as well as viaits internet pages. The BS, in its capacity as anational co-ordinator of the IMF’s SpecialData Dissemination Standard, also publishesa national internet page on this standard.

1.3.2.2 Main responsibilities of other publicauthorities in the macroeconomic statisticalfield and co-operation with the nationalcentral bank

The Statistical Office of the Republic ofSlovenia (SURS) is responsible for thecompilation of national accounts, prices andlabour statistics. The SURS, on the basis ofthe data collected by customs, also compiles

data on the cross-border trade in goods,which is used as an input for the Bank’s b.o.p.statistics.

The financial accounts also draw on statisticaldata on the general government processedby the Ministry of Finance, and informationcollected by other institutions, such as TheAgency of the Republic of Slovenia for PublicLegal Records and Related Services (AJPES),which manages business registers and collectsannual reports and other data from businessentities. Besides the data collected by theAJPES, data from the Securities MarketAgency (ATVP), the Authority for InsuranceSupervision (AZN) and internal BS data arealso used to compile the financial accounts.

1.3.2.3 Overview of statistical data collection andcompilation

See Table 1.




• Law on National Statistics, Official GazetteNo. 45/1995

This law defines national statistical activitiesand those entities authorised to performthese activities (including the BS); it alsoestablishes the national statistical council, thenational programme of statistical research andvarious aspects of collecting data andproducing national statistics.

• Medium-term Programme of StatisticalResearch 2003-2007 and AnnualProgramme of Statistical Research for 2003

The national programme of statisticalresearch, based on the Law on NationalStatistics (Official Gazette Nos. 45/1995 and9/2001), consists of a general medium-term

programme (five years) and a detailed annualprogramme (including subject, purpose,periodicity, date, reporting units and date ofdissemination of results). The annual nationalstatistical research programme is divided intoregular statistical tasks and developmentalones. The developmental part includesprovisions for the harmonisation of nationalmonetary and banking statistics with theECB’s requirements.

• Decree on the introduction and usage ofthe standard classification of theinstitutional sectors, Official Gazette No.57/1998

A regulation introducing the classification ofinstitutional sectors as per the third editionof the European System of Accounts 1995(ESA 95).

• Law on the Bank of Slovenia, OfficialGazette No. 58/2002, 4 July 2002


Slovenia

Table 1



and counterparts

Collected data

Collecting agents

U S E R S

Description Medium of reporting:e-mail, internet

BS BS ATVP, KDD, LjubljanaStock Exchange, MF

BS

BS, international institutions, thegeneral public

BS, international institutions, the general public BSUsers

– Balance sheets of the banksand savings banks (monthly)

– Selected balance sheet itemsof banks relating to liquidity(daily), used to calculate thebase of banks’ reserverequirements and the nationalmonetary aggregates(monthly averages)

– BS balance sheet (ten days,monthly)

– the collected data enablenational monetary aggregatesto be calculated in line withthe ECB’s definition

– Average commercial banks’ interest rates (monthly)

– Average effective commercial banks’ interest rates(quarterly)

– Interbank money market rates (daily)

– BS interest rates (daily, monthly)

– Securities primarymarket (BS billissues, Treasury billissues, generalgovernment bondissues, long-termsecurities issues –public offers –monthly)

– Unregulatedsecurities market(monthly turnover)

– Ljubljana StockExchange (turnover,capitalisation,indices – daily,monthly)

– Foreign portfolioinvestments(purchases and salesof securities byforeign investors –daily, monthly)

– Register ofSecurities andIssuers, Book ofShareholders(monthly)

– Securities PortfolioAnalysis by Sectors(quarterly)

– PortfolioInvestments Abroad(monthly)

Medium of reporting and timeliness:

– quarterly data: paper (25th calendar day after thereporting quarter)

– monthly data: electronic, paper and fax (up to sixworking days after the reporting month )

– daily data: electronic, telephone and fax

Medium of reporting andtimeliness:

– monthly data: local networkbetween banks and centralbank (up to sixth workingday after the reportingmonth)

– daily data: telephone and fax


Slovenia

Table 1 (continued)


Collected data

Collecting agents

Users

Description

BS BS

BS, internationalinstitutions

Eurostat, BS BS, internationalinstitutions,the general public

BS

Medium of reports:

– mostly paper

– facsimile and e-mail(daily data)

– diskettes

– Report on calculatedmandatory reservesbased on averagedeposit liabilities(monthly)

– Report on mandatoryreserve performance(monthly)

Main source:

– special reporting forms(questionnaires)covering information onassets and liabilities ofnon-financial andfinancial corporations,general government,NPISHs and partlyhouseholds (AJPES)

Supplementary sources:

– i.i.p. and b.o.p. (BS)

– Monetary statistics (BS)

– Financial marketsstatistics (BS)

– Payments to and fromnon-residents (one-monthly and five ten-day reports bycommercial bankscontaining individual,daily and ten-day data)

– Transactions ofenterprises with non-residents (monthly)

– Credit transactionsbetween residents andnon-residents(individuals)

– Claims and liabilities onshort-term trade credits(monthly)

– Investment of banks andenterprises to and fromforeign countries(annually)

– Indirect affiliatedinvestment ofenterprises in foreigncountries (annually)

– Indirect affiliatedinvestment from foreigncountries in enterprises(annually)

– Banks’ equity(quarterly)

– Risk-adjusted balancesheet and off-balance-sheet commercial banks’assets (quarterly)

– Claims and liabilities tonatural persons(quarterly)

– Large exposures(quarterly)

– Investment in stocks ofnon-financialinstitutions (quarterly)

– Average assets andliabilities interest rates(quarterly)

– Expected SIT inflowsand outflows of largestdepositors (daily)

– Deposits of 30 largestdepositors (monthly)

– Investment in stocks(semi-annually)

– Various data (annually)

AJPES, BS, KDD, ATVP,MF, AZN

Customs via SURS (goods)

BIS (resident deposits inforeign countries for i.i.p.)

BS (all other categories)

Medium of reports:

– local network betweenbanks and central bank

Timeliness: first workingday after the reportingmonth

Data serve mandatoryreserve purposes only

Medium of reports:electronic and in paper formTimeliness: for the mainsource, not yet determined(first reporting is duein 2003)

Medium of reports:

– local network betweenbanks and central bank

– e-mail, diskettes, paper

Timeliness: for b.o.p., up to40 days after month-end; fori.i.p., to 30 June of thefollowing year.


Slovenia

Law on the central bank, which makes BSresponsible for the collection, processing anddissemination of data and information inorder to support all functions required bythis and other laws.

• Law on Banking, Official Gazette No. 7/1999 and Act on the Amendments andAdditions to the Banking Act, OfficialGazette No 59/2001

National banking law with provisions onregular monthly reporting by banks andsavings banks to the central bank.

• Decree on books and business reports of thebanks and savings banks, Official GazetteNos. 24/2002 and 52/2002

A decree prescribing the manner of reportingof banks to the central bank and the Chart ofAccounts prescribed for the reporting ofbanks.

• Directive on transmission of the monthlyreports on bookkeeping balances of theaccounts, sent to banks on 5 April 2002

Detailed instructions for the reporting ofbanks.

2.1.2 Statistical standards followed

National monetary statistics are based on IMFstandards, namely the IMF Guide on Moneyand Banking Statistics (1984) and, as from2000, the IMF Manual on Monetary andFinancial Statistics. The balance sheet itemsin the Monthly Bulletin (national statistics)also reflect the ESA 95 definitions of sectors(described in detail below). Since 2000 agradual adjustment to the ECB standards(especially ECB/2001/13, with its correctionand corrigendum, and ECB 2002/5) has beentaking place, which already enables thecalculation of harmonised monetaryaggregates and their counterparts. Slovenianaccounting standards in banking mostlycorrespond to international accountingstandards. For the purposes of dissemination,

the IMF’s Special Data Dissemination Standard(SDDS) has been followed since itsintroduction in 1997.



Economic territory, according to the Decreeon the introduction of standard classificationof institutional sectors (Official Gazette No.56/1998, 7 August 1998), includes:

• Geographic territory administered by agovernment where persons, goods,services and capital move freely;

• Any free zones, including bondedwarehouses and factories under customscontrol;

• National airspace, territorial waters andthe continental shelf lying in internationalwaters, over which the country enjoysexclusive rights;

• Territorial enclaves outside the geographicterritory which are used under internationaltreaties or agreements between states bygeneral government agencies of the country(embassies, consulates, military bases,scientific bases, etc.);

• Deposits of oil, natural gas, etc. ininternational waters outside thecontinental shelf of the country which areexploited by units resident in the territoryas defined in the preceding sub-paragraphs.

The economic territory of Slovenia does notinclude parts of the geographic territory ofSlovenia used by general government agenciesof other countries, by the institutions of theEuropean Union or by internationalorganisations under international treaties oragreements between states.

Residents are defined as units involved ininstitutional, local or homogeneous


Slovenia

Table 2


Money-creating sector Bank of Slovenia (BS) Central bank

Commercial banks Deposit money banks that accept sight deposits and have bankinglicences granted by the BS. Only domestic banks owned byresidents or non-residents are included

Money-holding sector Non-monetary financial institutions Savings banks, savings and loan undertakings

Other financial institutions: other financial intermediaries, such asmutual funds, investment funds and financial leasing companiesand financial auxiliaries (securities brokers, stock exchanges),insurance corporations and pension funds

Non-financial enterprises Legal persons – market producers of goods and non-financialservices

Households Resident individuals as consumers and resident individuals as soleproprietorships, and partnerships being market producers andhaving no independent legal status

General government Central government Administrative departments and central government agencies

Local government Local administration and local government agencies

Social security funds Health fund and pension and disability fund

Non-profit institutions serving households Clubs, political parties, trade unions, churches or religioussocieties, humanitarian and charity organisations, professionalsocieties.

Non-resident sector Non-residents See 2.2.1.

production, and which have a centre ofeconomic interest on the territory of thecountry.

All other persons are defined as non-residents of the Republic of Slovenia. Thismeans specifically:

• natural persons without a permanentaddress in Slovenia, except those who havean official permit to work in Slovenia forsix months or more;

• natural persons with a permanent addressin Slovenia who have an official permit towork or live abroad;

• legal persons with a registered addressabroad, except diplomatic, consular andother entities financed by the Sloveniangovernment, Slovenian citizens employedthere and members of their families;

• diplomatic, consular and otherrepresentative bodies of foreigngovernments and internationalorganisations, together with citizens ofother countries employed there, andmembers of their families;

• representative offices and branches offoreign enterprises located in Slovenia,except for their permanent productionfacilities in Slovenia;

• representative offices and branches ofSlovenian enterprises located abroadbecause of their permanent productionfacilities abroad.



See Table 2.


Slovenia

The savings banks and savings and loanundertakings (HKSs) are very small monetaryinstitutions whose balance sheet aggregateshave never exceeded 2% of the balance sheetof the commercial banks. Because ofconsolidation problems (different breakdownof their accounts in comparison to the banks),their balance sheets are not included in thenational money-creating sector, but insteadare classified with the other financialintermediaries in the money-holding sector.

General government or central governmentare not considered to be part of a nationalmoney-neutral sector because of thesignificant amount of general governmentdeposits within the monetary aggregates, andthe fact that there is practically no financingof the Government by the central bank.


The comparison between the sectors isillustrated in Table 3.



A commercial bank is a joint-stock companywith a head office in the Republic of Sloveniathat has obtained authorisation from the Bankof Slovenia to provide banking services (Lawon Banking, Official Gazette No. 7/1999 andAct on the Amendments and Additions tothe Banking Act, Official Gazette No 59/2001).

Under the 1999 Banking Act, banks andsavings banks in Slovenia are authorised toprovide banking services (taking depositsfrom private individuals and legal persons andgranting credits for their own account) aswell as selected financial services.

Banks may offer other financial services,subject to authorisation by the BS, providedthey meet the requirements stipulated underthe law governing other designated financialservices. Other financial services foreseenunder the Banking Act are the followingfinancial services:

1. factoring;

2. financial leasing;

3. issuing of guarantees and othercommitments;

4. lending operations including consumercredits, mortgages and financing ofcommercial transactions;

5. trading in foreign means of payment,including foreign exchange transactions;

6. trading in financial derivatives;

7. collection, analysis and dissemination ofinformation on the credit rating of legalpersons;

8. mediation in sales of insurance policies inaccordance with the law governing theinsurance sector;

9. issuing and administering of paymentinstruments (e.g. payment and credit cards,traveller’s cheques, bills of exchange);

10. safe custody service;

11. mediation in the conclusion of loan andcredit transactions;

12. services in connection with securitiesaccording to the law governing thesecurities market;

13. management of pension or investmentfunds in accordance with the lawgoverning pension and investment funds;and

14. the performance of payment transactions.


Slovenia

S22


Table 3




Bank of Slovenia S121

Central bank


Commercial banks S122


S12

Financial corporationsMoney-holdingsector

Savings banks, savings and loans undertakings

S123


and pension funds

Money-holdingsector

S124


S125


Non-financial enterprises S11


Households S14

Households

Non-profit institutions serving households S15




General government

Money-neutralsector

S1312

State government

Money-holdingsector

S1313

Local government

Social security funds S1314


Non-residentsector

Non-residents S211

EUcountries

S21

EuropeanUnion

S2

Rest of the world

Non-residentsector

S212


Other financial institutions

n.a.

Local government

A savings bank may only provide banking andother financial services (with someexceptions) in SIT (except in the exchange offoreign currencies) and only for naturalpersons, individual entrepreneurs, smallcompanies and persons who do not perform

business activities (Banking Law, OfficialGazette No. 7, 5 February 1999).

Savings and loan undertakings are smallinstitutions established by the Law on Savingsand Loan Undertakings (Official Gazette Nos.


Slovenia

14 and 30, 1990) that provide services to alimited circle of clients, physical persons andcivil legal persons. A transitional period offive years has been granted to these savingsand loan undertakings through thenegotiations with the European Union toimplement capital and other requirements inline with the European banking directives thatapply to credit institutions. The majority ofsavings and loan undertakings opted to jointhe Association of Savings and LoanUndertakings (as financial institutions), whilethe remaining (an estimated 17) savings andloan undertakings are obliged to harmonisetheir requirements as above. Savings and loanundertakings failing to achieve full complianceby February 2004 will be liable forcompulsory (forced) liquidation.


Not applicable.


Not applicable.


The primary banking business productscomprise different kinds of SIT loans, foreigncurrency loans, demand deposits, timedeposits, foreign currency deposits andsecurities. A list of other products is providedunder item 2.3.1.


2.5.1 Description of the main items of thebalance sheet

ASSETS LIABILITIES

Domestic assets

Foreign assets

Other assets

Overdrafts and advances

Loans

Commercial paper and bonds

Shares and participations

Foreign currency

Deposits

Loans

Securities

Domestic liabilities

Foreign liabilities

Other liabilities

Deposits

Other foreign currency liabilitiesto government *

Deposits

Borrowings

Other foreign liabilities

Securities issued

Capital and reserves

Other liabilities

*) Liabilities of (some) banks for the undue foreign debt of the former Socialist Federal Republic of Yugoslavia.



Credit institutions 50Commercial banks 20Savings banks 2Savings and loan undertakings 28

Other monetary institutions

Total 51



Slovenia

ASSETS LIABILITIES

Instruments Counterparties Items Counterparties

Domestic assets

Overdrafts and advances

Domestic liabilities

– Deposits

SIT (demand deposits,savings deposits, timedeposits (up to 30 days,31-90 days, depositsredeemable at notice up to90 days, 81-180 days,181 days-1 year,1-2 years, more than2 years, restricted deposits)

Domestic sectors– Foreign currency deposits

Domestic sectorsLoans

– SIT loans (up to 30 days,31-90 days, 81-180 days,181 days-one year, one yearand more)

– Foreign currency loans(short term, long term)

Domestic sectors

Commercial papers and bonds Domestic sectors Other foreign currencyliabilities to government

Central government

Shares and participations Domestic sectors

Foreign assetsForeign currencyDepositsLoansSecurities

Broken down intonon-resident banksand non-monetary institutions

Foreign liabilitiesDepositsBorrowingsOther liabilities

Broken down into non-residentbanks and non-monetaryinstitutions

Other assets Domestic sectorsNational Bank of Yugoslavia

Other liabilitiesSecurities issuedCapital and reservesOther liabilities

Domestic sectorsDomestic sectors(breakdown as in table 2)

2.5.2 Breakdown of the main balance sheet items by instrument/maturity, counterpartyand currency


Slovenia

2.6 Monetary aggregates: definitionsand remarks



There are no other transferable negotiableinstruments besides banknotes and coins(banknotes issued by the central bank andcoins by the Government) included in themonetary aggregates. The amount held bythe public is determined as the differencebetween the banknotes and coins issued andthose held by the monetary institutions.Further allocation of banknotes and coinsamong the sectors is not determined.

Box 1Monetary aggregate M1 includes:

Currency in circulation;

SIT demand deposits of central government,

enterprises and non-monetary financial institutions

with the Bank of Slovenia;

SIT demand deposits with banks.


M1;

SIT time deposits of central government with the

BS;

SIT savings and time deposits with banks;

Deposits of banks in liquidation transferred to other

banks.


M2;

Foreign currency deposits of households with

domestic banks;

Foreign currency deposits of legal entities with

domestic banks.


Box 2Net foreign assetsForeign assets less foreign liabilities

Claims on general government

Claims on central government and other general

government (breakdown by sector available)

Claims on private sectorClaims on non-financial enterprises, households and

non-monetary financial institutions (breakdown by

sector available)

Other items net

Other assets less other liabilities (securities, other

foreign currency liabilities to central government,

restricted deposits and other liabilities)

The classification available on credit todomestic residents (by sector, type andmaturity) is as follows:

• By sector: Non-monetary financialinstitutions, households, non-financialenterprises, non-profit institutions, centralgovernment, local government, socialsecurity funds

• By type: SIT and foreign currency loans,overdrafts, other short-term loans, long-term loans for production, investment andhousing loans, and other long-term claims

• By maturity: (SIT loans: up to 30 days, 31–90 days, 81–180 days, 181 days – one year,one year and more; foreign loans: short-term, long-term)

2.8 Reserve money

Base money is the sum of banknotes incirculation, banks’ settlement accounts,overnight deposits, and other SIT demanddeposits (savings banks’ settlement accounts,savings banks’ and savings and loan undertakings’reserve accounts, plus the transactionalaccounts of central and local government).


Slovenia



all the institutions)

National central bank 1 100 25



Total 51 - 100




• Law on the Bank of Slovenia, Official GazetteNo. 58/2002, 4 July 2002

• Law on Banking, Official Gazette No. 7/1999, 5 February 1999 and Act on theAmendments and Additions to the BankingAct, Official Gazette No 59/2001, 19 July2001

• Decree on books and business reports of thebanks and savings banks; Official GazetteNos. 24/2002 and 52/2002 (including Chartof accounts for banks and savings banks)

• Directive on the transmission of the monthlyreports on bookkeeping balances of theaccounts; sent to banks on 5 April 2002.


Two savings banks and 28 savings and loanundertakings (HKS) report to the Bank ofSlovenia on a regular basis. However, theseare not consolidated with banks as creditinstitutions in the national monetary statistics,as described in section 2.2.2.1. By 2004,however, these institutions will have comeinto line with the provisions of the Bankinglaw, as explained in section 2.3.2.


Balance sheet items of commercial banks,savings banks and HKSs:

• reporting population: 21 banks, threesavings banks and 35 HKSs (100%coverage);

• all balance sheet items;

• monthly reporting; data are sent up to sixworking days after the end of the reportingmonth;

• accounting data are mostly in line withinternational accounting standards;

• medium of reporting: all commercial banksand two savings banks use the localnetwork between banks and the centralbank; one HKS uses e-mail with a PGP key;and the rest of the HKSs use diskettes.

Selected balance sheet items on the dailyliquidity of commercial banks:

• reporting population: 21 commercial banks(100% coverage);

• selected items;

• daily reporting;

• accounting data mostly in line withinternational accounting standards;

• medium: telephone or fax.


Slovenia


Balance sheet items for the Bank of Slovenia:

• full balance sheet;

• monthly reporting; at the latest tenworking days after the end of the reportingmonth;


• internal reporting system.

Ten-day balance sheet items for the BS:

• aggregation from full balance sheet;

• ten-day reporting for the tenth, twentiethand last day of the month; fifth workingday after the reporting period;


• internal reporting system.



The collected complete set of balance sheetdata for banks, savings banks, savings and loanundertakings and the Bank of Slovenia(including ten-day data) show the end-of-the-month data.

Selected balance sheet items of banks andthe central bank are collected on a daily basisin order to derive the monthly averages ofbase money and monetary aggregates.

2.10.2 Revisions

• Changes of methodology are announced inadvance;

• The data for December of the precedingyear are corrected after the annual accounthas been derived;

• Corrected data are marked when firstpublished in the monthly bulletin;

• Any changes to data are accompanied by acomment, when the nature of the changedemands explanation.


The following sections apply to changes inthe time series of stocks, as no flows arepublished in the Slovenian monetary statistics.

Slovenia complies with the IMF’s SDDS, andprovides information on revisions as well asadvance notice of major changes inmethodology.

To date, there have only been two majorbreaks in the monetary statistics series.

The first was due to a major change in thebalance sheet scheme for banks at thebeginning of 1994. In this case, there was athree-month period of simultaneousreporting of both the new and the oldapproaches, which permitted an adjustmentof past series already published, as well as ofthose reported to the IMF. All changes weremarked and explanatory notes added.

The second was the introduction of the ESA95-compliant sectorisation in the bankbalance sheet scheme in April 1999. Theexplanation for the changed data seriesresulting from this introduction is providedin the Monthly Bulletin of the Bank ofSlovenia.

Major changes in data can occur for variousreasons (including eventual reclassifications);these are normally explained, whereas theallowed or prescribed revaluationadjustments and write-offs/write-downs arenot commented upon.


Slovenia


The seasonal adjustment of time series fromthe relational database using the TRAMO/SEATS method is automated in the BS:seasonally adjusted series on nationalmonetary aggregates are published in thecharts of the monthly bulletin.

2.11 Publications


The first release of Bank of Slovenia ten-daybalance sheet to the public:

• sources: internal reporting system;

• subject: main aggregates of the balancesheet of the central bank;

• timeliness: fourth working day after thereporting period

• published on: internet page:

http:www.bsi.si/html/eng/financial_data/hit/bilanca_bs_dekadna.html(English)

The first release of the BS monthly balancesheet to the public:

• source: internal reporting system;

• subject: main aggregates of the central bankbalance sheet;

• timeliness: in the middle of the month afterthe reporting month;


www.bsi.si/html/eng/financial_data/hit/bilanca_bs_mes.html (English)

The first release of the consolidated balancesheet of the monetary system to the public:

• sources: monthly reports of banks andinternal reporting system;

• subject: main aggregates of consolidatedbanking sector balance sheet;

• timeliness: one month after the reportingmonth;


www.bs i . s i /html /eng/ f inanc ia l_data/h i t /mon_survey.html (English)

2.11.2 Key weekly/monthly publications

Details on the Monthly Bulletin:

• sources: reports, described above;

• main monetary aggregates, consolidatedbalance sheet of monetary system; ten-dayand monthly balance sheet of the Bank ofSlovenia, balance sheet of deposit moneybanks, declared monthly interest rates ofcommercial banks.

• published as: PDF file and print version,issued in the second half of the month;

• PDF file at www.bsi.si/html/eng/publications/bulletins/index.html (English),

• Monthly Bulletin printed version (English,Slovene).


There are no other regular statisticalpublications containing monetary statistics inSlovenia.


Slovenia

3 Contacts at the Bank of Slovenia


Bank of SloveniaFinancial Statistics [email protected] 351505 LjubljanaSloveniaPhone: +386 (1) 4719000Fax: +386 (1) 2515516, +386 (1) 2515541Telex: 31214 BS LJB SIE-mail: [email protected]: http://www.bsi.si/


Slovenia

Annex 1

Organisation chart of the Bank of Slovenia

Governor

Deputy Governor

Vice-Governor

Vice-Governor

Vice-Governor

Accounting

Banking Supervision

Banking Department

Financial Statistics

Central Banking Operations

Internal Audit

Legal Department

Banknote Department

Payment Systems

Analysis and Research Department

Information Technology

Organisation and Personnel

Building Services

Secretary General

Governor's Office


Slovenia

Organisation chart of the Statistics Department of the Bank of Slovenia

Annex 2

International InvestmentSection

Balance of payments,

Foreign diirect investment,

International Investment

Position, SDDS calendar

Statistics of CreditTransactions and Paymentswith the Rest of the World

b.o.p. and i.i.p. sources,

Foreign debt

Monetary Statistics SectionMonetary institutions,

Monetary balance sheets,

Modern means of payments

Financial Markets SectionFinancial accounts,

Interest rates,

Non-monetary financial

intermediaries,

securities

Technical Support andStatistical Methods

Publishing,

Technical support,

Statistical methods,

External (public and real

economy) statistics

Management

Documents

Money, Banking and Financial Market Statistics - European Central