FISIM, Property Income and Current
Transfers
International Workshop on Household Income,
Consumption and Full Accounting of the Households
Sector
26-28 March 2012, Beijing, China
UN STATISTICS DIVISION
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Financial intermediation services indirectly measured (FISIM)
• Concept
• Estimation
Financial services using own funds
• Concept
• Estimation
Property income • Primary income
• Concept
• Allocation of primary income account
• Estimation
• Balance of primary income
Taxes on income and wealth
• Concept
• Estimation
Social contributions and benefits
• Current transfers
• Concept
• Secondary distribution of income account
• Estimation
• Disposable income
Other current transfers
• Concept
• Estimation
Social transfers in kind
• Current transfers
• Concept
• Redistribution of income in kind account
• Adjusted disposable income
• Estimation
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Indirect measure of the value of financial
intermediation services provided but for which financial
institutions do not charge explicitly
Needs to be imputed because no explicit fees are
charged
Split actual interest transactions into
• SNA interest
• FISIM
Applies to loans and deposits
• Financial institutions
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Bank
interest
receivable
Loans
Deposits
SNA
interest
receivable
Bank
interest
payable
FISIM
SNA
interest
payable
FISIM
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FISIM  FISIM L  FISIM D   rL  rr  YL   rr  rD  YD
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FISIML = FISIM on loans
FISIMD = FISIM on deposits
rL = lending rate
rD = deposit rate
rr = reference rate
YL = stock of loans
YD = stock of deposits
rL YL = actual bank interest receivable on loans
rD YD = actual bank interest payable on deposits
rrYL (rrYD) = SNA interest on loans (deposits)
• Record in allocation of primary income account
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Reference rate
• Between interest rates on loans and deposits
• No service element
• Reflects risk and maturity structure of deposits and loans
• One reference rate per currency
• One method
• Average of the ratio of interest payable on deposits to
the stock of deposits and ratio of interest receivable
on loans to the stock of loans
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Allocation
• Some portion of domestically-produced FISIM to
households
• Final consumers (final consumption expenditure)
• Owners of dwellings
Intermediate
• Owners of unincorporated enterprises consumption
• Same for imports of FISIM
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Data sources
Domestically-produced FISIM
• If data on average stocks of loans and deposits and interest by
sector from monetary authorities are available
• Calculate FISIM on loans to households sector
• Owners of dwellings (dwelling loans)
Intermediate
• Owners of unincorporated enterprises consumption
• Other loans (final consumption expenditure)
• Calculate FISIM on deposits to households sector
• Owners of unincorporated enterprises (intermediate
consumption)
• Deposits as final consumers (final consumption expenditure)
• Bottom up method
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• Complete breakdown of data not always available
• Compute total FISIM on loans and deposits for
households
• Allocate FISIM on loans to
Intermediate
• Owners of dwellings (dwelling loans)
consumption
• Owners of unincorporated enterprises
• Other loans (final consumption expenditure)
Using indicators such as breakdown of data on loans
from other sources
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• Allocate FISIM on deposits to
• Owners of unincorporated enterprises (intermediate
consumption)
• Households as final consumers (final consumption
expenditure)
Using indicators from other sources such as
• Ratio of stocks of deposits to VA for smallest size corporations
• Ratio of stocks of deposits to turnover for smallest size
corporations
• Other solutions?
• Equal split?
• Professional judgement
• All FISIM on deposits to households as final consumers
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Imports of FISIM
• Data on stock of loans and deposits and interest on
loans and deposits from rest of world account
• Reference rate
• Total FISIM on loans and deposits
• Allocate FISIM on loans and deposits to households
sector according to distribution of domesticallyproduced FISIM
• Lack of data by currency to calculate imports of
FISIM seems to be a problem in many countries
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• Need to remove effects of changes in price from current-price
FISIM – volume measures
• Deflation method preferable to output indicator method
• Deflate stock of each type of loan and deposit using general
price indexes
• GDP deflator (excluding FISIM)
• Final domestic demand deflator (excluding FISIM)
• All-items CPI
• Calculate base period margin of each type of loan and deposit
• Base period margin on loan (deposit) = difference between
interest rate on loan (deposit) and reference rate
• Apply base period margin on loan (deposit) to deflated stock of
loan (deposit)
• Aggregate to obtain volume measures of FISIM
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• Possible for some financial institutions to make loans without
accepting deposits
• Own funds
• Examples
• Credit card issuers
• Finance associates of retailers responsible for financial
leasing
• Pawnshops
• Moneylenders
• Corporations
• Unincorporated enterprises
• Production and consumption
• Likely to be important in developing countries
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FL   rL  rr  YL
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FL = Financial service on loans
rL = lending rate
rr = reference rate
YL = stock of loans
rL YL = actual interest receivable on loans
rrYL = SNA interest on loans
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Possible Source
Credit card issuers
Monetary and financial statistics
Enterprise survey
Balance of payments
Finance associates of retailers
Monetary and financial statistics
Enterprise survey
Balance of payments
Pawnshops
Monetary and financial statistics
Enterprise survey
Balance of payments
Moneylenders
Monetary and financial statistics
Enterprise survey
HUEMs survey
Balance of payments
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Property income
• Accrues when owners of financial assets and natural
resources put them at disposal of other institutional units
• Sum of investment income and rent
• Investment income
• Income receivable by owner of financial asset in return for
providing funds to another institutional unit
• Rent
• Income receivable by owner of natural resource (lessor or
landlord) for putting natural resource at disposal of
another institutional unit (lessee or tenant) for use of
natural resource in production
• Resource lease
• Record in allocation of primary income account
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Breakdown
• Investment income
• Interest
• Distributed income of corporations
• Dividends
• Withdrawals from income of quasi-corporations
• Reinvested earnings on foreign direct investment
• Other investment income
• Investment income attributable to insurance
policyholders
• Investment income payable on pension entitlements
• Investment income attributable to collective
investment fund shareholders
• Rent
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Interest
• Form of income receivable by owners of certain kinds of
financial assets for putting financial asset at disposal of
another institutional unit
• Deposits
SNA interest
• Loans
• Debt securities (for example, bills, bonds)
• Accrual basis (continuously)
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Distributed income of corporations
Dividends
• Investment income to which shareholders become entitled as
a result of placing funds at disposal of corporations
• Shareholders are collective owners of corporations
• Record at point at which share price starts to be quoted on
ex-dividend basis
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Distributed income of corporations
Withdrawals of income from quasi-corporations
• Part of distributable income that owner withdraws from quasicorporation
• Analogous to payment of dividends
• Exclude withdrawals realised by sale of assets
Reinvested earnings on foreign direct investment
• Retained earnings of a corporation or quasi-corporation which
are equal to distributable income less dividends payable or
withdrawal of income from corporation or quasi-corporation
respectively
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Investment income disbursements
Investment income attributable to insurance policyholders
• Non-life, life insurance and reinsurance
• Standardized guarantees
• Result of investment of technical reserves of insurers
Investment income payable on pension entitlements
• Defined contribution and defined benefit schemes
• Defined contribution – investment income on the funds and net
operating surplus from renting land/buildings owned by the fund
• Defined benefit – actuarial calculation of increase in pension
entitlement coming from past service
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Investment income attributable to investment fund shareholders
• Include mutual funds and unit trusts
• Dividends
• Retained earnings attributed to investment fund shareholders
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Distribute to shareholders and reinjected via transaction in financial
account
Rent on natural resources
• Land
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Different from rentals payable on buildings or other structures
In practice, single payment for rent and rentals
Treat entire payment as rent if value of land exceeds value of
buildings/structures
• Subsoil assets
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Minerals or fossil fuels
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Possible Source
Investment income
SNA Interest
Monetary and financial statistics
Enterprise survey
HUEMs survey
Balance of payments
Interest on bonds, bills, etc
Monetary and financial statistics
Enterprise surveys
Government finance statistics
Balance of payments
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Possible Source
Distributed income of corporations
Dividends
Stock exchange
Tax authority
Household survey
Enterprise survey
Balance of payments
Withdrawals of income from quasicorporations
Enterprise survey
Balance of payments
Reinvested earnings on foreign
direct investment
Balance of payments
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Possible Source
Other investment income
Investment income attributable to insurance
policyholders
Monetary and financial statistics
Insurance Supervisory Commission
Balance of payments
Investment income payable on pension
entitlements
Monetary and financial statistics
Pension Supervisory Agency
Balance of payments
Investment income attributable to
investment fund shareholders
Monetary and financial statistics
Enterprise surveys
Balance of payments
Rent
Household survey
HUEMs survey
Government finance statistics
Enterprise survey
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Current transfer
• Transaction in which one institutional unit provides a
good or service to another unit without receiving from
the latter any good or service directly in return as
counterpart and does not oblige one or both parties to
acquire, or dispose of, an asset
• Directly affects level of disposable income
• Should influence consumption
• Relatively small, often made frequently and regularly
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Breakdown
• Current taxes on income, wealth
• Social contributions and benefits
• Other current transfers
• Record in secondary distribution of income account
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Taxes in general
• Compulsory, unrequited payments, in cash or in kind,
made by institutional units to government units
• Transfers
• Levied on incomes of households and corporations
• Accrual basis of recording
• Evidenced by tax assessments, declarations or
other instruments
• Include interest, fines, other penalties in practice
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Taxes on income
• Taxes on incomes, profits and capital gains
• Include taxes on
• Individual or household income
• Income of corporations
• Capital gains
• Winnings from lotteries or gambling
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Other current taxes
Current taxes on capital
• Taxes that are payable periodically, usually annually
on the property or net wealth of institutional units,
excluding taxes on land or other assets owned or
rented by enterprises and used by them in production,
such taxes being treated as other taxes on production
• Exclude
• Taxes on property or wealth levied infrequently and
at irregular intervals, or in exceptional
circumstances
• Income taxes assessed on basis of value of
property when incomes cannot be estimated
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Other current taxes
Current taxes on capital
• Include taxes on
• Land and buildings
• Net wealth
• Other assets
Miscellaneous current taxes
• Include
• Poll taxes
• Expenditure taxes
• Payments by households to obtain certain licenses (for
example, own or use vehicles, boats or aircraft,
recreational hunting, shooting or fishing)
• Taxes on international transactions
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Social contributions
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Actual or imputed payments to social insurance schemes to make provision for
social insurance benefits to be paid
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Payable by employers and employees
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Part of compensation of employees (primary allocation of income account)
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Payable by households in capacity as employed, self-employed or unemployed
persons in secondary distribution of income account
Net social contributions
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Social contributions
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plus contribution supplements (investment income payable on pension
entitlements)
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less service charge
Social benefits
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Current transfers received by households intended to provide for the needs that
arise from certain events or circumstances, for example, sickness, unemployment,
retirement, housing, education or family circumstances
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Social security benefits in cash (pension and non-pension)
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Other employment-related social insurance benefits (pension and non-pension)
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Social assistance benefits in cash
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Other current transfers
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Insurance-related transactions
• Net non-life insurance and reinsurance premiums
• Premiums earned and premium supplements less service
charge
• Non-life insurance and reinsurance claims
• Some proportion may be recorded as capital transfers
• Net fees under standardized guarantees
• Fees earned and fee supplements less service charge
• Calls under standardized guarantees
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Current transfers within general government
• Consist of current transfers between different government
units
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Other current transfers
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Current international cooperation
• Consists of current transfers in cash or in kind between
governments of different countries or between governments and
international organizations
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Miscellaneous current transfers
• Current transfers between central bank and general government
• Current transfers to NPISHs (for example, membership dues,
subscriptions, voluntary donations, etc, on a regular or
occasional basis)
• Current transfers between households (for example, remittances)
• Fines and penalties
• Lotteries and gambling
• Payments of compensation for injury to persons or damage to
property not settled by non-life insurance claims
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Possible Source
Taxes on income
Individual or household income
Tax authority
Balance of payments
Income of corporations
Not applicable to households
Capital gains
Tax authority
Balance of payments
Winnings from lotteries or gambling
Tax authority
Balance of payments
Other current taxes
Tax authority
Balance of payments
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Possible Source
Net social contributions and benefits
Monetary and financial statistics
Pension Supervisory Agency
Government finance statistics
Enterprise survey
Balance of payments
Other current transfers
Insurance-related transactions
Monetary and financial statistics
Insurance Supervisory
Commission
Balance of payments
Current transfers within general
government
Not applicable to households
Current international cooperation
Not applicable to households
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Possible Source
Current transfers between central bank and
general government
Not applicable to households
Current transfers to NPISHs
Household survey
Enterprise survey
Current transfers between households
Household survey
Balance of payments
Fines and penalties
Government finance statistics
Balance of payments
Lotteries and gambling
Enterprise survey
Balance of payments
Payments of compensation for injury to
persons or damage to property not settled
by non-life insurance claims
Administrative data
Household survey
Enterprise survey
Balance of payments
Note: If direct estimation is not possible, the total may need to be allocated to households using indicators.
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Property income and current transfers receivable/payable
by households and other sectors
Source data may be able to provide estimate of
proportion allocated to households
• Direct estimation is possible
If not, use source data to estimate amount allocated to
households in conjunction with various indicators
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Specific example
• Source data may only be able to provide total investment
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income attributable to non-life insurance policyholders
• Direct estimate of amount attributable to households not
available
Allocate estimate of investment income attributable to non-life
insurance policyholders who belong to households by share of
premiums for households in total premiums
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Social transfers in kind
• Goods and services provided to households by
government and NPISHs either free or at prices that
are not economically significant
• Final consumption expenditure of general government
and NPISHs on behalf of households
• Individual goods and services (for example, health
and education)
• Distinct from collective services (for example,
defence and street lighting)
• Estimated from government finance statistics and
survey of NPISHs
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Thank You
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