Eurostat, the statistical office of the European Union

Eurostat, C1, National accounts methodology. Indicators

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The Total financial sector liabilities indicator measures the evolution of the sum of liabilities of the Financial corporations sector (S.12), which includes Currency and deposits (F.2), Debt securities (F.3), Loans (F.4), Equity and investment fund shares/units (F.5), Insurance, pensions and standardised guarantee schemes (F.6), Financial derivatives and employee stock options (F.7), and Other accounts payable (F.8).

Financial flows and stocks data are often referred to collectively in the national accounts framework as 'financial accounts'. Financial flows consist of transactions and other flows, and represent the difference between the opening financial balance sheet at the start of the year and the closing balance sheet at the end of the year. The data are compiled in accordance with the European System of Accounts (ESA 2010), which came into force in September 2014.

The MIP scoreboard indicator is the non-consolidated Total financial sector liabilities, 1 year percentage change. For the MIP purposes data published are annual, non-consolidated by institutional sectors and financial instruments.  

The classification system follows the European System of Accounts 2010 edition (ESA 2010). The indicators are categorised by institutional sectors and financial instruments.

The institutional sector taken into account is Financial corporations (S.12). The sector consists of institutional units which are independ­ent legal entities and market producers, and whose principal activity is the production of financial ser­vices. Such institutional units comprise all corpo­rations and quasi-corporations which are princi­pally engaged in financial intermediation (financial intermedi­aries) and/or auxiliary financial activities (financial auxiliaries). Also included are institutional units provid­ing financial services, where most of either their assets or their liabilities are not transacted on open markets.

For further information on institutional sectors and sub-sectors, see European System of Accounts 2010 edition (ESA 2010).

The MIP scoreboard indicator is the non-consolidated Total financial sector liabilities, 1 year percentage change. The indicative threshold for the indicator is 16.5%.

The indicator measures the evolution of the sum of liabilities of the Financial corporations sector. The instruments taken into account to compile Total financial sector liabilities are:

• Currency and deposits (F.2) - this item represents currency in circulation and deposits, both in national currency and in foreign currencies;
• Debt securities (F.3) - negotiable financial instruments serving as evidence of debt;
• Loans (F.4) - loans are created when creditors lend funds to debtors;
• Equity and investment fund shares/units (F.5) - equity and investment fund shares or units are residual claims on the assets of the institutional units that issued the shares or units.
• Insurance, pensions and standardised guarantee schemes (F.6) divided into six subcategories: non-life insurance technical reserves (F.61); life insurance and annuity entitlements (F.62); pension entitlements (F.63); claims of pension funds on pension managers (F.64); entitlements to non-pension benefits (F.65); and provisions for calls under standardised guarantees (F.66);
• Financial derivatives and employee stock options (F.7):
  
  • Financial derivatives are financial instruments linked to a specified financial instrument or indicator or commodity, through which specific financial risks can be traded in financial markets in their own right. Financial derivatives meet the following conditions: they are linked to a financial or non-financial asset, to a group of assets, or to an index; they are either negotiable or can be offset on the market; and no principal amount is advanced to be repaid.
  • Options are contracts which give the holder of the option the right, but not the obligation, to purchase from or sell to the issuer of the option an asset at a predetermined price within a given time span or on a given date.

• Other accounts payable (F.8) - these are financial assets and liabilities created as counterparts to transactions where there is a timing difference between these transactions and the corresponding payments.

Financial transactions take place between resident institutional units, and between them and the rest of the world. They are recorded in the financial account, which shows how the surplus or deficit of the capital account is financed by transactions in financial assets and liabilities. Thus, the balance of the financial account (B.9F) is conceptually equal in value to net lending / net borrowing (B.9) the balancing item of the capital account. The financial account indicates how net borrowing sectors obtain resources by incurring liabilities or reducing assets, and how net lending sectors allocate their surpluses by acquiring assets or reducing liabilities. The financial account also shows the contributions to these transactions of the various types of financial assets, and the role of financial intermediaries. Most transactions involving the transfer of ownership of goods or assets or the provision of services have some counterpart entry in the financial account. Moreover there are many transactions that are recorded entirely within the financial account, where one financial asset is exchanged for another or a liability is repaid with an asset. Financial assets may be created through the incurrence of liabilities. Such transactions change the distribution of the portfolio of financial assets and liabilities and may change their total amounts but do not affect the net lending / net borrowing (B.9).

Balance sheets are statements of the value of the stocks of assets and liabilities at a particular point of time and can be drawn up for institutional units, institutional sectors and the whole economy. The balancing item of the financial balance sheet (i.e., excluding non-financial assets) is the 'net financial assets' (BF.90), calculated as the difference between total financial assets and total liabilities. A closing financial balance sheet is equal to the opening balance sheet plus changes resulting from financial transactions and other flows (revaluations and other changes in volume of financial assets/liabilities).

Time of recording: In principle, flows are recorded on an accrual basis, that is when economic value is created, transformed or extinguished, or when claims and obligations arise, are transformed or are cancelled; the time of recording is often not when cash is exchanged.

Valuation rules: In principle, financial flows and stocks are recorded at exchange or market value. For detailed valuation rules that apply to some categories of financial instruments, see ESA 2010.

Consolidation refers to the elimination of reciprocal flows or stock positions in financial assets and liabilities between units when the latter are grouped. Consolidation is a method of presenting the accounts for a set of units as if they constituted one single entity (unit, sector, or subsector). It involves eliminating transactions and reciprocal stock positions and associated other economic flows among the units being consolidated, i.e. data do not take into account transactions within the same sector.

More details are provided in European System of Accounts 2010 edition (ESA 2010) Chapter 5 - Financial transactions.

Institutional units as defined in ESA 2010 § 2.12-2.13.

The target population consists of all institutional units in the Financial corporations sector.

The MIP scoreboard presents data for each EU Member State, as well as euro area (EA) and the European Union as a whole. 

Details on data availability are available under the tables:

tipsfs10 Total financial sector liabilities, non-consolidated -1 year% change - annual data;
tipsfs11 Total financial sector liabilities, by sub-sectors, non-consolidated - % of GDP;
tipsfs12 Total financial sector liabilities, by sub-sectors, non-consolidated - million units of national currency;
tipsfs13 Total financial sector liabilities, by instruments, non-consolidated - % of GDP;
tipsfs14 Total financial sector liabilities, by instruments, non-consolidated - million units of national currency;
tipsfs20 Financial sector leverage (debt to equity), non-consolidated - %;
tipsfs30 Total financial sector liabilities, consolidated;
tipsfs31 Total financial sector liabilities, by sub-sectors, consolidated - % of GDP;
tipsfs32 Total financial sector liabilities, by sub-sectors, consolidated - million units of national currency;
tipsfs33 Total financial sector liabilities, by instruments, consolidated - % of GDP. 

tipsfs34 Total financial sector liabilities, by instruments, consolidated - million units of national currency.

Not applicable

Data are presented in % of GDP, million units of national currency and 1 year percentage change.  

The reference period is the calendar year.

National accounts are compiled in accordance with the European System of Accounts ESA 2010 (see annex below), as defined in Annex B of Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013. The Commission Implementing Decision (EU) 2018/1891 of 30 November 2018 amends the Implementing Decision 2014/403/EU on granting derogations to Member States with respect to the transmission of statistics pursuant to Regulation (EU) No 549/2013 of the European Parliament and of the Council concerning the European system of national and regional accounts in the European Union.

The indicator Total financial sector liabilities, non-consolidated, 1 year percentage change, is one of the MIP Scoreboard headline indicators set up under Regulation (EU) No 1176/2011 of the European Parliament and of the Council.

Not applicable

Regulation 2015/759 of 29 April 2015, amending Regulation (EC) No 223/2009 on European statistics of 11 March 2009 [(recital 24 and Article 20(4))], stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those data with due account for technical developments and the requirements of users in a democratic society.

Not applicable

There is no release calendar for the financial accounts data. Once checked and validated by Eurostat, data are released on the public web site. Revisions may occur at any time when new data are submitted.

The official deadline for sending the data according to the ESA 2010 transmission programme is at T + 9 months. However, many countries transmit provisional data earlier, any time from T + 3 months onwards. All the data of EU Member States should be validated and published by the third week of October.

There is no release calendar for MIP scoreboard indicators.

The MIP Regulation stipulates that “the Commission shall make the set of indicators and the thresholds in the scoreboard public” (Art. 4, para. 6, Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and correction of macroeconomic imbalances) and that “the Commission shall update the values for the indicators on the scoreboard at least on an annual basis” (Art. 4, § 8).

In line with the Community legal framework and the European Statistics Code of Practice, Eurostat disseminates European statistics on Eurostat's website (see §10 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Annual

News releases on-line

The indicators part of the MIP Scoreboard are used to identify emerging or persistent macroeconomic imbalances in EU countries. The Scoreboard is part of an annual exercise, where the first step is the compilation of an Alert Mechanism Report (AMR).

See data availability for the tables: tipsfs10; tipsfs11; tipsfs12; tipsfs13; tipsfs14; tipsfs20; tipsfs30; tipsfs31; tipsfs32; tipsfs33; tipsfs34.

Not applicable

Not applicable

The methodological framework is defined in the European System of Accounts 2010 edition (ESA 2010). Documentation on sources and methods is available from national statistical offices, national central banks, and Eurostat.

Eurostat's mission is to provide the European Union with a high-quality statistical information service - see: Eurostat quality framework.

Moreover, the statistics underlying the Scoreboard indicators are subject to a specific quality assurance framework developed within the MIP context.

Quality is assured by application of ESA 2010 concepts and by a validation process on the data delivered by countries.

For the quality assurance of the statistics underlying the MIP Eurostat and the DG Statistics of the European Central Bank signed a Memorandum of Understanding (MoU) establishing a mutual recognition of the respective ESS and ESCB quality assurance frameworks, when the Member States have designated their National Central Banks for producing the datasets: Balance of payments and international investment position statistics and Financial accounts.

Data are collected from reliable sources applying high standards with regard to methodology and ensuring high comparability. ESA 2010 data transmissions are subject to regular quality assessment reviews. Article 4 of Regulation (EU) No 549/2013 (ESA 2010 Regulation) specifies that the data covered by that Regulation is subject to the quality criteria, namely relevance, accuracy, timeliness and punctuality, accessibility and clarity, comparability and coherence, as set out in Article 12(1) of Regulation (EC) No 223/2009 of the European Parliament and of the Council.

The quality assurance framework for the Macroeconomic imbalance procedure (MIP) follows a three-level structure:

The first level assesses the reliability and comparability of MIP underlying statistics and addresses relevant quality issues; it also enhances the communication on quality assurance of MIP statistics towards the European Parliament and Council, policy makers and the public at large. This level draws on the information gathered in levels two and three (see below).

The second level consists of domain-specific quality reports produced by Eurostat and the ECB summarising the main findings for the euro area or the EU Member States. Reports assess the underlying compilation process and its robustness, describe its legal basis and evaluate whether the statistics are in line with international statistical standards.

The third level consists of national quality reports (self-assessments) produced by the institution compiling the national statistics. Most of these reports are voluntarily published by Members States on the CMFB’s website and their availability depends upon the statistical domain.

The indicator Total financial sector liabilities, non-consolidated, is one of the headline indicators of the MIP Scoreboard. The MIP Scoreboard is used as an early warning system in the context of the macroeconomic surveillance of EU Member states. The MIP Scoreboard consists of a set of fourteen indicators, covering the major sources of macroeconomic imbalances. The aim of the scoreboard is to trigger in-depth studies, which will analyse whether potential imbalances identified in the early-warning system are benign or problematic.

Not available

With some exceptions the dataset is complete, taking into account country 'derogations' (exemptions from the legal obligation to provide the data).

The MIP indicators are associated with a high level of overall accuracy. The data transmitted by Member States are checked in Eurostat for their consistency and plausibility. If any problem is detected, Eurostat contacts the relevant Member State asking to check the figures or to confirm the changes. Apart from internal consistency checks of the data, Eurostat undertakes revision analysis and additional checks.

Due to the large size of the source dataset, it is difficult to measure overall accuracy.

Not applicable

Not applicable

For EU countries, the formal transmission deadline is t+9 months. A few countries transmit to Eurostat provisional data at t+3 months and updates each quarter. Other countries may send to Eurostat between t+6 and t+9 months.

Punctuality depends on the delivery of basic data used for calculating the MIP indicators. Normally all Member States have transmitted the data within three weeks of the official deadline.

The comparability is assured by the application of common definitions: European System of Accounts (ESA 2010).

By using a common framework, the European System of Accounts 2010 edition (ESA 2010), data are comparable over time.

Financial accounts are part of an integrated set of national accounts. Therefore consistency checks are possible with the component data and with other national accounts tables submitted to Eurostat. Some variables can be cross-checked, for example, with government finance statistics, others with balance of payments statistics. National data might also be verified against official national sources.

Annual financial accounts may also be checked to the quarterly financial accounts supplied by the ECB, although there will be timing and other differences.

Arithmetical consistency and other checks are made by Eurostat on each country's dataset.

Not available

For financial accounts, some countries follow the Harmonised European Revision Policy in national accounts to a greater or lesser extent. Others revise according to national schedules. 

Data are rarely flagged as provisional but may be subject to revision, as new input data become available. Benchmark revisions may occur to a country's dataset every few years. Minor changes in methodology may also be implemented and might not be widely announced. Major changes in methodology are the result of legislation, and therefore announced in the Official Journal of the European Union.

Information may be derived directly from the units of the institutional sector for which they are needed, or else indirectly from counterpart information on other sectors. In many cases, financial intermediaries or institutions are the counterpart, acting as debtor or creditor.

Information in which the financial sector is not involved normally has to be obtained directly. However, in some cases (particularly in the households and non-profit institutions serving households sectors) there is a lack of direct or counterpart information and estimates have to be made. Residual methods (residuals may be obtained after the recording of other items in the accounting framework) may be used for calculating such estimates.

In general, the most important sources used to compile national annual financial accounts are statistics on financial intermediaries, particularly monthly money and banking statistics, and quarterly data provided by other financial institutions. Other main sources are balance of payments and international investment position statistics, government finance statistics and securities data of government debt management bodies, capital market statistics, direct information on non-financial corporations, and surveys of businesses or households. Although source data may come from surveys, the compilation of financial accounts is intended to be exhaustive.

Annual. In some cases countries transmit the data to Eurostat more frequently, for example quarterly.

Reporting tables of the ESA 2010 transmission programme, to be completed by national authorities. They are transmitted to Eurostat in SDMX format.

The validation process consists of arithmetic consistency and other quality checks. The formal transmission at T+9 months undergoes a more thorough validation process as the data are compared to government finance / EDP statistics, and analysed for MIP purposes.

The rules on compilation of financial balance sheets are established according to the European System of Accounts 2010 edition (ESA 2010), see chapter 7. Balance sheets are usually compiled from a combination of stock and flow source data.
The recorded values should reflect the prices observable on the market on the date to which the balance sheet relates. When there are no observable market prices estimates should be made.
Data on credit flows can be either estimated from the direct data sources on transactions or derived from the stocks in the balance sheets.

No adjustments are made to reported country data.

See the related metadata for additional information.