Report and Accounts 1999

Statistics

Internationalisation in general and the cooperation within the EU in particular have increased the need for a uniform basis for comparison of the economic and financial development in various countries. Substantial work has been carried out by various international fora in recent years to standardise access to and the contents of economic and financial statistics. The IMF has developed a data dissemination standard – SDDS ^[1] – with the purpose of increasing the level of information on economic and financial trends in different countries. The coordination of economic policy within the EU and the adoption by 11 EU member states of the single currency make more stringent requirements of the reporting of statistical data to respectively Eurostat and the ECB. This also makes demands of the Danish statistics which particularly in the financial area require expansion in order to achieve compliance with these guidelines.

International Statistical Cooperation

IMF's Special Data Dissemination Standard – SDDS
SDDS was established in April 1996 in the wake of the financial crisis in Mexico in 1994-95. The standard was established to promote the dissemination of economic and financial statistics in order to improve the market participants' basis for assessment of a particular country's economic and financial situation.

Subscription to the SDDS is voluntary. At the close of 1999 47 participating countries, comprising both industrialised and developing countries, had subscribed to SDDS and thereby undertaken to comply with the requirements of the standard. Box 9 presents an outline of SDDS.

Box 9 The Requirements Set Out in SDDS

SDDS covers 4 main categories within financial and economic statistics: the real sector, the fiscal sector, the financial sector and the external sector. These are supplemented with the category of population. On subscription to SDDS the countries undertake to observe the requirements listed below and to provide information to the IMF's information database.

Coverage, periodicity and timeliness
SDDS specifies exactly which indicators should appear from the statistics as a minimum in each category, as well as the periodicity and timeliness of dissemination.

Access
SDDS requires simultaneous release to all market participants and dissemination of a release calendar.

Integrity
The SDDS requires the dissemination for each data category of the terms and conditions under which the statistics are produced and disseminated. Furthermore, internal government access to data before release should be stated as well as information about revision policies and major changes in methodology.

The requirements in SDDS are subject to ongoing tightening with regard to the data to be disseminated to the general public by the subscriber countries. In the wake of the economic crisis in a number of Southeast Asian countries the IMF's Executive Board at the end of 1998 and in the spring of 1999 adopted a number of measures to expand SDDS. At the same time the IMF generally increased the surveillance of the countries' compliance with the standard.

At the end of 1999 the countries were required to present a national data page containing the key economic indicators. This national data page must at all times present the latest data releases and must be available from the IMF's information database via a hyperlink to the Web site of for example the national statistics agency or the national central bank.

In addition, new guidelines concerning the central banks' publication of their foreign-exchange reserves have been prepared. According to these guidelines the foreign-exchange reserves are to be published on a far more detailed basis than before and the compilation must include data on the liabilities related to the foreign-exchange reserve. The statistics must also include details of central-government assets and liabilities in foreign currency. The detailed compilation of the foreign-exchange reserves must be published on a monthly basis with a time lag of maximum one month, while data on the gross reserves must be published no later than one week after the end of the month. The guidelines enter into force on 31 March 2000.

Furthermore, it has been announced that as from 31 December 2001 SDDS will include requirements concerning dissemination of data on the countries' international investment position, which will be included from a later date.

Cooperation on statistics within the ECB
At European level the collection and standardisation of economic and financial statistics for the EU member states are undertaken by Eurostat, the statistical body of the European Commission, and the ECB. Eurostat is primarily responsible for the economic statistics, while the ECB handles the financial statistics. This division of work between Eurostat and the ECB is formalised in an agreement in which the exchange of statistical information is an important element.

Both areas are subject to ongoing standardisation of the statistical compilations which the EU member states are to report to Eurostat and the ECB as an element of the coordination of economic policy within the EU and the transition to the single currency in 11 EU member states.

The background to the ECB's work in the statistics field is that as the monetary-policy authority for the euro area the ECB needs to be able to assess the monetary and economic development in the euro area. Moreover the ECB also has a clear interest in being able to monitor the development in the non-euro area member states. This applies in particular to Denmark in view of the mutually binding agreement on fluctuation limits for the exchange rate of the krone vis-à-vis the euro, cf. the ERM II agreement, p. 80.

In the run-up to the introduction of the euro the EMI, the predecessor of the ECB, in July 1996 published a report, the implementation package, setting out the statistics required by the ECB in the third stage of EMU ^[2].

The central element of the implementation package was the harmonisation of balance-sheet statistics for monetary financial institutions, MFIs. In addition to the ECB and the national central banks of the EU the MFI sector primarily consists of credit institutions as defined in the EU banking directives, as well as money-market funds. The MFI sector's liquid liabilities such as deposits and close substitutes for deposits are the basis for the compilation of the monetary aggregate for the euro area, which plays a central role in the ECB's monetary policy.

Since July 1998 the other EU central banks have reported balance-sheet statistics for MFIs to the ECB. In 1999 the work focused primarily on further harmonisation and improvement of the MFI statistics. The ECB has at the same time embarked on the preparations for implementation of the other elements of the implementation package, which are described in Box 10.

Box 10 The Implementation Package

In addition to the further development of the balance-sheet statistics for the MFI sector the ECB has embarked on a number of other statistics. In 1999 the ECB began to release provisional securities statistics and statistics concerning the lending and deposit rates of the MFI sector. Like the new balance-sheet statistics for the MFI sector these statistics are published in the ECB's Monthly Bulletin. The ECB's provisional statistics are compiled on the basis of the correlation of a number of existing national statistics. In 1999 the ECB began to develop permanent harmonised interest-rate statistics. This work will be intensified in 2000 and the new statistics will impose new reporting requirements on the financial sector. In addition, the ECB also began to develop permanent securities statistics.

With regard to the other financial statistics mentioned in the implementation package the ECB is expected during 2001 to release provisional statistics concerning non-MFI financial institutions such as investment associations, financing companies and credit-card companies. In 1999 the ECB worked on identifying and systemising the national statistics in this area. In the longer term the ECB is expected to develop harmonised balance-sheet statistics for these financial institutions along the lines of the new balance-sheet statistics for the MFI sector. In addition, the group of financial institutions may be expanded to include insurance companies and pension funds.

In 1999 the ECB and the national central banks continued their work on compiling quarterly financial accounts for the euro area. Financial accounts are financial balances at sectoral level. These accounts also include information on transactions in assets and liabilities on the financial balance sheet during the period in question. Financial accounts are derived statistics, i.e. they are compiled on the basis of other independent statistics. The first financial accounts for the euro area are expected to be released in 2000.

In 1999 the ECB began to publish a total balance of payments for the euro area. The main items are published on a monthly basis and are supplemented with more detailed information on a quarterly basis. Throughout 1999 the ECB and the EU central banks sought to improve the quality of the released balance-of-payments statistics. Towards the end of 1999 the ECB released the first compilation of the international investment position of the euro area.

Other economic statistics comprise e.g. price indices, national accounts statistics, various cyclical indicators and government-finance statistics. Within the EU these statistics are compiled mainly by Eurostat and the national statistics authorities. A number of statistics are released in the ECB's Monthly Bulletin.

The Development in Denmark

Implementation of SDDS
Denmark was one of the first countries to subscribe to the IMF's SDDS in June 1996 and observes the prescribed guidelines for dissemination of economic and financial statistics.

Preparations for the implementation of the most recent adjustments of the standard concerning the establishment of a data page for Denmark and the guidelines for the Nationalbank's publication of the foreign-exchange reserve, cf. above, have been under way since the autumn of 1999.

The development of the Danish data page was completed at the end of 1999. The data page was then submitted to the IMF for approval. Once it is approved the data page will be published on the Nationalbank's Web site ^[3]. The IMF will establish a link from its information database to the Danish data page, so that the information can also be accessed from the IMF's Web site. At a later stage the data page will be maintained by Statistics Denmark which is responsible for the compilation of most of the data.

The data page contains the two latest observations for approximately 90 variables within the four main categories of financial and economic statistics in SDDS. Furthermore, the data page will present information on the publication frequency for each variable and the date of the last observation. The page will be updated on an ongoing basis as soon as new information becomes available.

The Nationalbank aims to apply the new IMF guidelines to the reporting of the foreign-exchange reserve as from March 2000. A summary compilation of the Nationalbank's foreign-exchange reserve will still be published on the second banking day of each month. The detailed compilation of the foreign-exchange reserve, including the other required information categories, such as central-government assets and liabilities denominated in foreign currency, is expected to be ready for publication at the end of April 2000.

New balance-sheet statistics for the MFI sector
In 1996 the trade organisations of the financial sector, the Danish Financial Supervisory Authority, Statistics Denmark and Danmarks Nationalbank concluded a mutual agreement to introduce new balance-sheet statistics for Danish MFIs based on the EMI's statistical guidelines.

In contrast to the euro area member states and the other non-euro area member states it was also agreed to let the implementation of the statistics in Denmark span over a longer period of years than prescribed by the EMI.

The practical work of establishing the MFI statistics has been ongoing since 1998 in a number of working groups which include representatives of the authorities as well as the financial sector.

The balance-sheet statistics for the MFI sector ^[4] set out a far more detailed breakdown of the balance-sheet items by country, currency and sector than in the present balance-sheet statistics for banks and mortgage-credit institutes. The reporting population has also been expanded to include credit institutions other than banks or mortgage-credit institutes, as well as the Nationalbank. Another innovation is that statistics will also be collected from even the smallest banks, as well as from money-market funds.

The financial statistics are now reported to the Nationalbank as an element of the cooperation between the authorities. The new reporting regulations and forms are designed to also include the banks' statistical reporting to other bodies. The new reporting scheme for the MFI statistics thus now includes quarterly sectoral/industry statistics, quarterly and biannual balance-sheet statistics to BIS ^[5], and the banks' contribution to the indirect compilation of the gross national product, the FISIM statistics. MFIs subject to these reporting obligations can thus benefit from a more homogeneous and streamlined reporting scheme.

In April 1999 the working groups concerning new balance-sheet statistics in the MFI sector completed the preparation of the guidelines concerning the content and technical design of the future statistics. In the 2nd half of 1999 the reporting institutions and the Nationalbank embarked on development and adjustment of their computer systems as an element of the technical preparations.

This work is expected to be completed in October 2000 when the reporting banks will begin reporting data for the new balance-sheet statistics for MFIs. The first total balance-sheet statistics for the MFI sector will be prepared with effect from December 2000 at the latest when reporting to the ECB will also commence.

Expansion of the financial statistics
The Nationalbank finds that Denmark should at all times comply with international statistical standards. This also applies to the financial area. The ECB has put the implementation package of 1996 into practice, cf. Box 10, and against this background it can be expected that considerable expansion of Denmark's financial statistics in the coming years will be required.

The Nationalbank intends to monitor this work closely. The objective is to expand the financial statistics at the same pace as the other EU member states.

Extra resources will be required in the Danish financial sector to achieve the anticipated expansion of statistics, and likewise the Nationalbank will devote considerably more resources to its own work in the statistics area, especially in the next few years.

The Framework for Preparation of Statistics

Cooperation agreement between Statistics Denmark and Danmarks Nationalbank
By tradition Statistics Denmark and the Nationalbank have cooperated closely on the compilation of statistics concerning Denmark's external balance as well as financial statistics. With regard to the balance of payments the division of responsibilities and tasks between the two institutions is relatively clear. Statistics Denmark is responsible for compiling the overall balance of payments, although a significant proportion of the data originates from the Nationalbank's payments statistics in which external payments are recorded. The Nationalbank is responsible for compiling the external debt, including collection of data, compilation and publication of the debt statistics. The division of work has been less clear in the area of financial statistics in so far as both Statistics Denmark and the Nationalbank collect and publish statistics.

The expected expansion of the financial statistics during the coming years, which is a prerequisite for Denmark's continued compliance with international statistical standards, has therefore reinforced the need to clarify the division of responsibilities and tasks as well as the specific planning of the expansion of the financial statistics. After negotiations on the scope of the work Statistics Denmark and the Nationalbank in the autumn of 1999 concluded an agreement in principle on the division of the responsibilities related to the preparation of statistics.

Under this agreement the Nationalbank undertakes to ensure compliance of the Danish financial statistics with international standards during 2001. This includes observance of the guidelines which have been and will be set out regarding the EU member states' reporting of financial statistics to the ECB. The agreement between Statistics Denmark and the Nationalbank corresponds to the division of work between Eurostat, which handles the cooperation between the statistics agencies of the EU member states, and the ECB. The agreement reflects similar arrangements in the other EU member states where financial statistics are the responsibility of the central banks.

During the spring of 2000 the agreement will be supplemented with an actual cooperation agreement covering all aspects of the cooperation on statistics between Statistics Denmark and the Nationalbank. Besides extending and formalising the cooperation between the two institutions the cooperation agreement will aim to minimise the reporting burden imposed on the sectors concerned by providing for reporting to one authority only to the greastest possible extent (the unit-reporting principle).

The Nationalbank's authority to prepare statistics
The Nationalbank is formally authorised to collect statistics concerning the foreign-exchange area, but not for the financial area. The financial statistics currently prepared by the Nationalbank – the monthly balance-sheet statistics for banks and mortgage-credit institutes – are based on the current accounting standards for the financial sector and on the Financial Supervisory Authority's mandate to collect accounting data from the financial sector for the purpose of supervision.

Against the background of the forthcoming expansion of the financial statistics in Denmark, which will be the responsibility of the Nationalbank, cf. the agreement with Statistics Denmark, it was considered appropriate that the Nationalbank be authorised to compile the financial statistics. Since the purpose of expanding the financial statistics is to enhance international comparability it will not be possible to maintain the close accordance between supervisory and statistical data which previously applied in Denmark. Furthermore, efficient cooperation between Statistics Denmark and the Nationalbank assumes access to exchange confidential information used for the preparation of the statistics. This in itself makes it necessary for the Nationalbank to be authorised to collect statistics and to have the status of statistical authority in line with Statistics Denmark.

The Nationalbank seeks to establish a mandate to compile financial statistics by amendent of the Statistics Denmark Act. The bill was submitted to the Folketing (Parliament) towards the end of 1999. Among other things the bill provides for Statistics Denmark to assign the collection, processing and publication of financial statistics to the Nationalbank. In addition, the Nationalbank's authority to collate statistics is extended with regard to both the type of information to be provided and the reporting population of business enterprises. This ensures that it holds the appropriate authority to achieve the expansion of Denmark's financial statistics. According to the bill the Act will enter into force on 1 April 2000. The Nationalbank's authority to compile financial statistics will come into effect on the conclusion of cooperation agreement with Statistics Denmark, as described above.

Footnotes

[1] The Special Data Dissemination Standard.

[2] Statistical Requirements for Stage Three of Monetary Union (Implementation Package), EMI, July 1996.

[3] The data page will be available at the Nationalbank's Web site (www.nationalbanken.dk) under Statistics – SDDS.

[4] A review of the statistical requirements of the MFI sector is found in Kjeld Ole Nielsen and Anders Mølgaard Pedersen, New Balance-Sheet Statistics for Monetary Financial Institutions, Danmarks Nationalbank, Monetary Review, 4th Quarter 1999.

[5] The largest banks report a breakdown by country and currency of their most significant international accounts to the Nationalbank for further reporting to the Bank for International Settlements, BIS.

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Version 1.0 April 2000 Nationalbanken.
Published by Danmarks Nationalbank April 2000, http://www.nationalbanken.dk