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1993 SNA Update Information - Interest and related issues

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
The guidance in the1993 SNA about how transactions relating to index-linked debt instrument is not precise. When the principal is indexed, the redemption value is not known until maturity; as a result, interest flows are not known before maturity. What should be recorded for interest and principal repayment in the period before maturity? Further, for some instruments, the indexation may lead to valuation gains. How should these be recorded?
For debt instruments with both principal and coupons indexed to a foreign currency, the currency of account is important for distinguishing transactions from holding gains and losses. These may be different from an assessment made on the basis of the currency of settlement. Does this mean that debt indexed to foreign currency should be treated in the same way as foreign currency debt, that is as if denominated in foreign currency?
Loans with concessional interest rates could be seen as providing a transfer from lender to borrower. Should such transfers be recognized in the SNA? Although there is no clear definition of what is a concessional loan, the guidance in the External Debt Guide suggests features such as an intention to convey a benefit and occurrence in a noncommercial setting (usually government-togovernment). If concessional loans are not recognized in the core accounts, should the concessional amounts be considered as supplementary information where they are significant?
Neither the 1993 SNA nor the Balance of Payments Manual discusses the issue of fees payable on securities lending and gold loans. The fee for securities lending is for putting a financial instrument at the disposal of another unit, but it does not fit with the definition of interest when the legal ownership is transferred but the economic risks and rewards of the ownership remain with the original owner. The fee payable on gold loans appears to be a payment for services as gold in this instance is non-monetary gold.
Corresponding papers (Click on icon to see document in either pdf or word format)
AEG papers:Papers not yet available
AEG summaries:Papers not yet available
Number of AEG recommendations:none
Number of country comments:none
Number of expert comments:none
Corresponding AEG Meetings
The issue was not discussed at any of the meetings which took place so far. It will be discussed at a later time.
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