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1993 SNA Update Information - Financial assets classification

Issue description
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Continued innovation in financial markets since the 1993 SNA was written means a review of the classification used for financial instruments is appropriate. Suggestions for change arise for most of the present categories.
(a) Monetary gold
Should monetary gold be treated as a financial asset rather than as a valuable?
(b) SDRs
The 1993 SNA classifies Special Drawing Rights (SDRs) as assets without corresponding liabilities arguing that IMF members do not have an unconditional liability to repay their SDR allocations. However, SDR allocations have attributes of liabilities because interest is payable on them and a country terminating IMF membership would be required to repay its obligations including any SDR allocations. Also, the IMF Monetary and Financial Statistics Manual recommends that the value of allocated SDRs be shown both on the assets and liabilities side of the balance sheets of central banks, which is in accordance with the IMF’s SDR Department’s guidance to member countries. Should SDR allocations be considered liabilities in the SNA?
(c) Distinction between loans and deposits
The criteria to make the distinction between deposits and loans are not clear. Recent financial innovations raise questions about the continuing analytical usefulness of the distinction. A particular problem is when a position between two parties, especially financial institutions, is seen as a deposit by one party and a loan by the other. Should the SNA maintain a distinction between loans and deposits?
(d) Traded loans
When and under what circumstances do loans that are traded become securities? This is important because virtually all loans are tradable and trading has increased. It also affects market valuation since securities are valued at market price in the SNA and loans at nominal values.
(e) Securities other than shares
With financial derivatives treated as a separate instrument in the 1993 SNA, it would be appropriate to introduce the term “debt securities” to replace “securities other than shares”.
(f)Financial derivatives
Should there be a distinction between different types of financial derivatives, for example between forwards and options as well as the inclusion of employee stock options (see issue 3) in this category?
Corresponding papers (Click on icon to see document in either pdf or word format)
AEG papers:Posted on 07/03/2006Click here to see pdf documentClick here to see word documentClassification and terminology of financial assets and liabilities in the updated SNA
 Posted on 23/01/2006Click here to see pdf documentClick here to see word documentReport on e-discussion on Non-Monetary Gold
 Posted on 03/01/2006Click here to see pdf documentClick here to see word documentInternational reserves
 Posted on 03/01/2006Click here to see pdf documentClick here to see word documentLiability aspects of SDRs
 Posted on 03/01/2006Click here to see pdf documentClick here to see word documentNon-monetary gold
 Posted on 15/08/2005Click here to see pdf documentClick here to see word documentClassification of financial instruments
 Posted on 15/08/2005Click here to see pdf documentClick here to see word documentBorderline between securities and other financial instruments
 Posted on 15/08/2005Click here to see pdf documentClick here to see word documentThe distinction between deposits and loans in macro-economic statistics
 
AEG summaries:Posted on 07/04/2006Click here to see pdf documentClick here to see word documentClassification and terminology of financial assets and liabilities in the updated SNA
 Posted on 07/04/2006Click here to see pdf documentClick here to see word documentFinancial instruments – non-monetary gold
 Posted on 30/09/2005Click here to see pdf documentClick here to see word documentTraded loans (borderline between securities and other financial instruments)
 Posted on 30/09/2005Click here to see pdf documentClick here to see word documentDistinction between loans and deposits
Statistics
Number of AEG recommendations:4
Number of country comments:95
Number of expert comments:none
Corresponding AEG Meetings
The issue was discussed at the following meetings:
July 2005, Jan/Feb 2006
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