FISIM
UN STATISTICS DIVISION
Economic Statistics Branch
National Accounts Section
UNSD/NA/MR
1
Background
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Developments in the financial markets
have changed the way financial
corporations operate
Is the 1993 SNA recommendation for
calculating output of financial
corporation services still relevant?
Current SNA definition of financial
intermediaries

Financial corporations are defined as “…all resident corporations

Financial intermediation itself is defined as
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or quasi-corporations principally engaged in financial
intermediation or in auxiliary financial activities which are
closely related to financial intermediation” (Paragraph 4.77).
“…a productive activity in which an institutional unit incurs
liabilities on its own account for the purpose of acquiring
financial assets by engaging in financial transactions in the
market. The role of financial intermediaries is to channel funds
from lenders to borrowers by intermediating between them.
They collect funds from lenders and transform, or repackage,
them in ways that suit the requirement of borrowers. They
obtain funds by incurring liabilities on their own account, not
only by taking deposits but also by issuing bills, bonds or other
securities. They use these funds to acquire financial assets,
principally by making advances or loans to others but also by
purchasing bills, bonds, or other securities.
Current SNA
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By the current SNA definition, financial
intermediaries exclude own-funds.
Own-funds by banks and money lenders are
not supposed to generate services.
Interest payments paid on own-funds are
pure interest.
Consequently, output of financial
intermediaries is calculated as:
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Fisim + explicit service charges
Fisim = Propety income receivable (not including
those on own-funds) less interest payable.
Change in financial environment
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Financial corporations, even banks, currently operate in broad
ranges of activities, besides liquidity transformation. They incur
liabilities like deposits, but also other securities (bills, bonds,
mutual funds, market funds, etc.) and then acquire assets such
as loans but also other financial assets (stocks, bills, bonds and
other securities).
Financial corporations are involved in risk management, liquidity
transformation and/or auxiliary financial activities.
Thus, financial corporations are redefined and recommended by
the AEG as resident corporations or quasi-corporations
principally engaged in providing financial services to other
institutional units. The production of non-insurance financial
services is the result of risk management, liquidity
transformation and/or auxiliary financial activities.
Output of financial corporations
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Output of financial corporations is
recommended by the AEG to be broadly
termed financial services instead of only
intermediation.
Therefore:
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services provided by using own-funds should be
also taken into account.
Returns from all financial investments including
shares should be used in calculating Fisim.
Fisim calculation
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Though broadly defined, fisim is still conservatively
measured on the basis of deposits and loans using
the reference rate.
fL + fD = (rL –rr)L + (rr – rD)D
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Fisim on own funds:
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fL: fisim on loan, fD: fism on deposits
rr: reference rate, rL: interest rate on loans, rD: interest rate
on deposit
L: stock of loans, D: stock of deposits.
(rL –rr)L
Advantage: fisim can be easily allocated to borrowers
and depositors.
Reference rate
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a rate that has no service element in it and
reflects the risk and maturity structure of the financial
assets and liabilities to which indirect service charges
applies.
single reference rate should be used but, when
relevant, a country could choose to use multiple rates.
different reference rates should be used for transactions
in other currencies.
Reference rate can be simply calculated as follows:
rr

R
0.5 D
 D

RL 

L 
Thank You
Central bank (CB) output
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Separate establishments should be established for
units in the CB undertaking market and non-market
production when market is significant.
Non-market activities are treated as collective
services consumed by general government with a
matching income transfer from CB to general
government so that there is no net cost to the
government.
Market output is provided on an individual basis to all
sectors against their payment for these services.
When interest rate set by CB is so high or so low, the
difference with average interest rate should be
treated explicitly as tax or subsidy by government.