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"Report and Accounts 2000"

Statistics

Danmarks Nationalbank is in the process of expanding the Danish financial statistics. This is related to the efforts within especially the EU to standardise the member states' statistics. Danmarks Nationalbank and Statistics Denmark have also intensified their cooperation on improving the quality of the Danish balance-of-payments statistics.

Expansion of the financial statistics

The Nationalbank's work in the area of financial statistics has been stepped up considerably since the autumn of 1999 when the Nationalbank concluded an agreement in principle with Statistics Denmark to take over the responsibility for expanding the Danish financial statistics in accordance with international guidelines, cf. the 1999 Annual Report p. 100. In the spring of 2000 this agreement was followed by a cooperation agreement between Statistics Denmark and the Nationalbank in the statistics area, and an amendment of the Statistics Denmark Act giving the Nationalbank the formal authority to collate financial statistics.

The need to expand the financial statistics is based particularly on the cooperation within the EU and the transition to the single currency, which requires a comprehensive picture of the economic and financial development in the individual countries and within the entire EU and euro area. National statistics are therefore being harmonised, so that member states' economic and financial statistical reporting to Eurostat, the statistical body of the European Commission, and the ECB, is brought on a comparable footing.

The compilation principles for the financial statistics are determined by the ECB together with the national central banks on the basis of a report on statistical requirements for stage three of EMU^[1] published in 1996 by the EMI, the predecessor of the ECB.

Even though Denmark has not adopted the euro the Nationalbank participates in the ECB's statistical collaboration on an equal footing with the other central banks and must observe the guidelines on EU member states' financial statistical reporting to the ECB.

In addition to new balance-sheet statistics for monetary financial institutions, MFIs, introduced in the autumn of 2000, the expansion of the financial statistics will include such areas as securities statistics, interest-rate statistics, statistics for investment associations and the preparation of quarterly financial accounts for the key sectors of the economy.

As a consequence, in the years to come the Danish financial sector must expect to spend more resources on generating the necessary reporting basis for the expansion of financial statistics.

Balance-sheet statistics for the MFI sector
Since 1998 the Nationalbank has worked with the trade organisations in the financial sector, the Danish Financial Supervisory Authority and Statistics Denmark on introducing new balance-sheet statistics for Danish MFIs, i.e. the Nationalbank, banks and mortgage-credit institutes, other credit institutions and money-market funds. This work was completed in October 2000, when regular reporting commenced. Reporting guidelines and forms have been coordinated among the relevant authorities so that financial statistical reporting to the various bodies is integrated into one system administered by the Nationalbank.

The new balance-sheet statistics for MFIs^[2], which replace the former monthly balance-sheet statistics for banks and mortgage-credit institutes, have been published since the beginning of 2001. The MFI statistics differ from the former balance-sheet statistics for banks and mortgage- credit institutes in a number of respects. For example, the balance-sheet items are compiled at market value, in contrast to book value as before, and the distribution by sector, maturity, currency and country is far more detailed than in the former statistics. To give a comprehensive view of balance-sheet trends within the MFI sector, the Nationalbank has prepared and published^[3] comparable historical data from 1991.

Interest-rate statistics
Interest-rate statistics vary greatly among the EU member states, in terms of both method of calculation and coverage. The ECB is therefore working with the national central banks to prepare new, harmonised interest-rate statistics. The purpose is to establish an improved basis for analysis of the monetary transmission mechanism, and furthermore, when combined with the balance-sheet statistics for MFIs, to achieve a better insight on the development in the financial structure in the EU and the euro area.

The interest-rate statistics will comprise the MFI sector's deposits from and lending to households and non-financial companies by instrument type and maturity. To a great extent they will correspond to the balance- sheet statistics for MFIs. The details of the new interest-rate statistics in the EU member states will probably be determined in the 2nd half of 2001, with reporting from the start of 2003.

The introduction of the interest-rate statistics in Denmark will provide a considerably more detailed picture of the development in the interest rates of the MFI sector than the present quarterly interest-rate statistics. Once the precise content is determined, the Nationalbank will establish a working group with representatives from the trade organisations of the financial sector, the Danish Financial Supervisory Authority and Statistics Denmark in order to prepare the introduction of the statistics in Denmark.

Securities statistics
Securities statistics are also given high priority internationally. This is mainly due to a need to improve the compilation of cross-border portfolio investments. At present there is a considerable degree of asymmetry between the national statistics, owing to major variations in collection and compilation methods. Detailed statistics on securities portfolios and securities issues will also be an important supplement to the MFI statistics, and a necessary prerequisite for the compilation of financial sector accounts, cf. p. 97. In the longer term the International Monetary Fund, IMF, plans to establish a global securities database, based on either national data or data from international institutions. The ECB is also active in this respect. By the end of 2001 the ECB aims to establish a European securities database, based primarily on information from the EU central banks.

The Nationalbank, VP A/S - The Danish Securities Centre and Statistics Denmark are working together to establish a similar database for Denmark by the end of 2001. This securities database will be based on monthly reports giving detailed information on the individual securities issued by Danish companies in Denmark and abroad. In the longer run, the database will also include information on holders of securities. Most of this information is already registered by VP A/S - The Danish Securities Centre. However, in certain areas additional information will have to be compiled, first and foremost data on the issue of securities abroad by Danish companies and financial institutions. Regular collection of such information directly from the relevant parties is planned to start in the 1st half of 2001. Later on, it may also be necessary to collate information on ownership from the institutions administering the securities on behalf of customers.

Investment associations
The strong growth in the assets managed by investment associations in recent years has increased the macroeconomic necessity of adequate statistics for this area. The Nationalbank, the Federation of Danish Investment Associations, Statistics Denmark and the Danish Financial Supervisory Authority have therefore decided to expand the existing statistics for investment associations. These statistics will be based on the MFI statistics template, but they will be less detailed. Initial reporting will take place in July 2001 on the basis of information from the 2nd quarter.

The ECB is likewise working to establish EU statistics for investment associations. In most other EU member states too they account for the majority of "other financial intermediates than MFIs".

Financial account
A financial account gives a comprehensive view of the financial assets and liabilities of a sector at the time of compilation and of the financial transactions during the period in question. It is used for e.g. economic analyses and forecasts. Unlike other financial statistics, which are based on reporting from the financial sector, the preparation of annual and quarterly financial accounts is based on the compilation and analysis of existing statistics from other sources, including MFI balance sheets, capital-account and securities statistics.

Both Statistics Denmark and the Nationalbank are establishing a financial account for the key sectors of the Danish economy. The responsibility for the annual financial account lies with Statistics Denmark under the regulation on the European System of Integrated Economic Accounts. Except for accounts for the government sector, the Nationalbank is responsible for the preparation of the quarterly financial account. The Nationalbank intends to publish the first quarterly financial account in 2002, comprising the period from 1997 to 2001.

Survey of the foreign-exchange and derivatives markets
Since 1989, the Bank for International Settlements, BIS, has conducted surveys of the foreign-exchange and derivatives markets every three years. The most recent survey took place in 1998^[4].

The next survey is due to take place in 2001, with the participation of the Nationalbank and 49 other central banks. The contributions of the individual central banks are based on information collected from the largest national market players. The survey will comprise two elements. The first is the trading volume in April 2001 in both the foreign-exchange market and the markets for currency and interest-rate derivatives. The second is information related to outstanding business as of end-June in currency, gold, interest-rate, share, commodity and credit derivatives.

The Nationalbank expects to publish the results of the survey in the autumn of 2001.

Quality improvements to balance-of-payments statistics

The basis for the compilation of Denmark's external balance of payments is prepared jointly by Statistics Denmark and the Nationalbank. The Nationalbank compiles and publishes information relating to payments between Denmark and other countries, i.e. the payments statistics. This information, together with the foreign-trade statistics, etc., is included in the balance of payments prepared and published by Statistics Denmark.

Information related to external payments is sourced mainly from the banks via an electronic reporting system introduced in October 1998^[5]. For payments in excess of a certain threshold not only the amount, but also the purpose is reported. This threshold was originally kr. 60,000, but was raised to kr. 100,000 from 1 January 2001. Since payments below this threshold are reported collectively, the increase has reduced the number of reported payments significantly and eased the reporting burden for banks and companies.

The introduction of the Nationalbank's new electronic reporting system has created a good basis for cooperation between Statistics Denmark and the Nationalbank with a view to improving the quality of the balance-of-payments statistics. For example, it is now possible to compare the foreign-trade statistics on companies' external trade in goods with payment statistics on payments for goods. A survey based on comparisons in selected periods of 1999 and 2000 was completed in June 2000.^[6] Comparisons will continue and are to be expanded to cover services, whereby the payments statistics will be compared with other relevant statistics.

Parallel hereto, the Nationalbank has conducted a survey of transit payments in the payments statistics during the period from January 1999 to March 2000. This survey led to a minor redistribution of respectively goods and services payments and will be repeated at intervals. The Nationalbank intends to conduct similar surveys of selected areas. This applies particularly to areas where no effective payments are made, e.g. when companies set off receivables against amounts payable.

From time to time it is also necessary to conduct a more exhaustive assessment of the robustness of the reporting system in relation to the development in the financial markets in general, and the payment patterns in particular. The trend in other EU member states is to phase out the payments-based data collection systems in favour of collecting balance-of-payments information directly from companies. The reporting systems of many countries are outdated, and the balance-of-payments statistics inadequate. Furthermore, the single market and the euro are expected to lead to greater financial integration within the EU, so that it will probably become more and more common for business enterprises to effect payments via foreign banks. This will make it even more difficult for individual central banks to collect data on cross-border payments via the banking system. Finally, Eurostat and the ECB are seeking to harmonise the collection of statistics on the balance of payments of the member states in order to achieve consistency in the overall balance-of-payments statistics for the EU and the euro area. This will also accommodate the wishes of many large European companies for more uniform reporting procedures in the member states. In due course these factors will amplify the present trend for the collection of the balance-of-payments information directly from companies.

Compared to other countries, the payments statistics of the Nationalbank are based on a relatively new reporting system. It has thus been possible from the outset to avoid some of the weaknesses seen elsewhere. It is obvious that the system will eventually come under pressure as a consequence of changing payment patterns. This is one reason that Statistics Denmark and the Nationalbank have embarked on a joint project to establish a basis for assessing any weaknesses in the present reporting system and the need, some years on, to restructure the compilation of the balance-of-payments data. The aim is to achieve balance-of-payments statistics of the best quality possible, as well as a rational compilation method.

Footnotes

[1] Statistical Requirements for Stage Three of Monetary Union (Implementation Package), EMI, July 1996. The requirements are described in more detail in the document Statistical Information Collected and Compiled by the ESCB, ECB, May 2000, which can be seen at www.ecb.int.

[2] For a more detailed description of the balance-sheet statistics for the MFI sector, see Kjeld Ole Nielsen and Anders Mølgaard Pedersen, New Balance-Sheet Statistics for Monetary Financial Institutions, Danmarks Nationalbank, Monetary Review, 4th Quarter 1999.

[3] See Financial Statistics – Special Reports, No. 1, 14 February 2001.

[4] See Henning Dalgaard, Survey of the Foreign-Exchange Market and the Markets for Financial Derivatives in 1998, Danmarks Nationalbank, Monetary Review, 4th Quarter 1998, and Financial Statistics – Special Reports, No. 4, 30 November 1998.

[5] See Lasse Tryde, The Nationalbank's New Reporting System for Payments Statistics, Danmarks Nationalbank, Monetary Review, 2nd Quarter 1999.

[6] Report on the Project to Improve the External-Trade and Payments Statistics (in Danish), published by Statistics Denmark, June 2000. The survey is also described in the article Comparison of Goods Trade and Goods Payments, Danmarks Nationalbank, Monetary Review, 3rd Quarter 2000.

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Version 1.0 March 2001 Nationalbanken.
Published by Danmarks Nationalbank March 2001, http://www.nationalbanken.dk