SDC/2008/168
SNA User Needs for
Monetary and Financial Policy-making
Steven Keuning
Director-General Statistics, ECB
High Level Forum for the Long-Term Development of the SNA
17-18 November 2008, Washington D.C.
Outline
 SNA 2008: immediate follow-up
 SNA user needs for
 Monetary policy-making
 Fiscal policy monitoring
 Financial stability assessment
 Five key issues in the further development of the national accounts
 SNA action plan
 Future SNA governance structure and issues for discussion
SNA 2008: immediate follow-up
 SNA implementation phase in the coming years (2009 to 2014)
 EU countries according to the ESA revision and ECB legal acts
 Aligned implementation plans for other standards (BPM), at least in EU
 Regular (e.g. quarterly) compilation of global aggregates
 The ECB drafts various (parts of) chapters of the new ESA
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Financial transactions, balance sheets and other flows
Financial institutional units and groupings of units
Pensions
European accounts
 The ECB as a compiler and user of national accounts
 Already reflect on future research agenda and governance
 Financial issues and their intertwinement with ‘real economy’ increasingly key
 The ECB/Central Banks partly involved in SNA 2008 process and governance
 ECB member of the UNSC (EU-delegation) and AEG, but not of ISWGNA
 Participation in various international committees and working groups
 Actively involved in drafting, commenting and consultation (on financial accounts)
SNA user needs for monetary and financial policy-making (i)
 Monetary policy-making …
Economic analysis, monetary analysis, cross-check of outcome of economic
analysis with that of monetary analysis, analysis of the channels through which
monetary policy influences prices and economic activity, forecasting
 … requires:
Complete set of fully consistent quarterly financial and non-financial sector
accounts and balance sheets
Accounting matrices with full from-whom-to-whom accounts (debtor-creditor
principle), to analyse intersectoral transmissions/interactions/frictions
Sub-sectoring of corporations (foreign/ public/private, SMEs) and households
(type of income, financial position), because of their heterogeneous reactions
Capturing financial innovation (true sales, synthetic securitisation; repos)
Timely data, but also long time-series
Close link with monetary data: implies minimal imputations and re-routings
Review of contribution of financial capital as a production factor;
SNA user needs for monetary and financial policy-making (ii)
 … and:
 Fiscal policy monitoring
 Both general government and public sector (specific set of accounts for
non-financial and financial public corporations)
 Close link to accounting standards for the public sector
 Pensions
 Other social benefits (health, long-term care, social assistance)
 Structural reforms, privatisations, nationalisations
 Government provisions and contingencies (implicit liabilities, guarantees)
as memo items
SNA user needs for monetary and financial policy-making (iii)
 Financial stability assessment
 SNA concepts and definitions do not entirely follow requirements for macroprudential analysis (‘group’-consolidated accounts as satellite accounts?)
 However, core accounts still useful in assessing macroeconomic soundness
 Quarterly institutional sector accounts
 Macro-prudential indicators derived from financial balance sheets and transaction
accounts (indebtedness or leverage of corporations)
 Accounting matrices (counterparty knowledge is crucial: impact of decisions of
economic subsectors, e.g. to alter the level and composition of their portfolios, on
the counterparty subsectors)
 Concept of institutional units and not of establishment units
 Supplementary data on multinationals
 Continental or even world-wide registers
 Holdings, SPVs, conduits
5 Key issues in the further development of national accounts
1. Main purpose: macroeconomic communication, policies & research:
 Whole-economy perspective is key (at the micro-level: ‘costs are costs’, at the
macro-level ‘costs can be receipts’ -> avoid the ‘fallacy of composition’)
 SNA to include inter-sectoral interactions (full matrix, beyond flow-of-funds)
2. Core national accounts focus on measurable, monetary flows/stocks:
 Incomplete welfare concept, but key for economic & monetary policy-making
 Linkage to monetary flows (e.g. turnover) possibly to be strengthened
3. Modern economies are mostly service- and not industry-oriented:
 Human capital as decisive production input: wages/employment by labour type
 Institutional unit much more relevant than establishment unit, even for
production (differential access to finance, intangible capital): more subsectors
(distributions matter), less attention to ISIC (economics is not engineering)
4. Review treatment of risk (derivatives, off-balance sheet, FISIM)
5. Economies are intimately interlinked, particularly financially:
 Rethink validity of concepts (e.g. reinvested earnings) in a globalised world
 Regular compilation of ‘consolidated’ accounts and continental/global accounts
SNA action plan
 Implementation
 Limited set of standard tables for all countries (implementing SDMX)
 Emphasis on (quarterly) integrated sector accounts and balance sheets
 Timeliness, consistency (market valuation) and from-whom-to-whom (accounting
matrices); increasingly distinguishing relevant sub-sectors
 Standardised satellite accounts (environment, possibly unpaid labour)
 Additional tables according to regional/national needs (e.g. ESA)
 Regular compilation of world and (world-)regional accounts and indicators
 Research agenda (revising current SNA long-term research agenda)
 Complete coverage of key production factors (financial/non-financial capital,
labour by type) and related productivity measures
 Units: is the establishment unit still meaningful? Role of multinationals, SPVs
 International linkages: can globalisation and ‘national’ accounts be reconciled?
 Production-income-revaluation split
 Risk-production split (derivatives, premiums, financial services, insurance)
 Asset boundary (intangibles, human capital, environment) and asset prices
Future SNA governance structure and issues for discussion
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Governance should reflect
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SNA user and compiler needs for monetary and financial policy-making
Increasing importance of financial issues and financial services
Revision process, seasonal and working-day adjustments
Desirability of aligned international standards (SNA, ESA, BPM, GFS, MFS)
ISWGNA: structure and process should reflect these needs
Sufficient expertise required in sector accounts, particularly financial accounts
Issues for discussion
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Five key issues in the further development of national accounts
Implementing the research agenda (task forces on specific key issues?)
Future governance structure and revision process (role of the ISWGNA)