Euro Area Statistics

Skopje Seminar2-5 October 2013

Jean-Marc IsraëlHead of Division,Monetary and Financial StatisticsECB

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ECB / Eurosystem / ESCB functions

• Define and implement monetary policy

• Conduct foreign exchange operations/hold and manage official foreign reserves

• Promote smooth operation of payment systems

• Contribute to smooth conduct of policies relating to banking supervision and stability of the financial system

[Eurosystem: ECB and national central banks of 17 (18 from 1.1.14) countries in the euro area]

[European System of Central Banks (ESCB): ECB and national central banks of 28 EU Member States]

Economic and Monetary Union(EMU)

FI

BE

LU

NLDE

FR

ESPT

IT

AT

SI

MT

BG

ROHU

PL

CZSK

EE

LV

LT

SE

DK

UK

IE

CY

GR

EU Member Stateswith a special status

EU Member Stateswith a derogation

HR

EU Member Stateswhich have adopted the euro

Key characteristics of the euro area

Population (millions)

Gross fixed capital formation (% of GDP)

GDP (PPP, € trillions)

GDP per capita (PPP, € thousands)

Share of world GDP (PPP, %)

Exports (goods and services, % of GDP)

Gross saving (% of GDP)

€ -17 EU -27*

333

9.5

28.5

13.7

26.8

18.4

20.2

504 314 128

13.4 12.3 3.5

26.6 39.3

19.4

18.3

17.9

18.9

18.9

14.1

15.8

12.9

27.6

5.6

15.4

21.2

24.5 **

* The figures for Croatia are not yet available.Sources: for euro area and EU: ECB, Eurostat, national data, IMF and ECB calculations; for the United States and Japan: national sources, IMF.

** refers to 2011

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Governance of European statistics (I)

The ESCB

ECB

National Central Banks

Monetary and financial statistics International reserves Effective exchange rates Quarterly financial accounts

European System of Central Banks

European Statistical System

Eurostat

National Statistical Institutes

General economic statistics (e.g. GDP, HICP, other price statistics, labour market, other short-term statistics, foreign trade) Other statistics (e.g. agriculture)

Balance of payments International investment position Non-financial sector accounts

Shared responsibility

+

Prime responsibility Prime responsibility

+

The ESCB and the European Statistical System (Eurostat and National Statistical Institutes) develop, produce and disseminate European statistics

under separate legal frameworks, reflecting their respective governance structures

Memorandum of Understanding between ESS and the ESCB (updated, April 2013) enhanced cooperation:

• European Statistical Forum – strategic cooperation

• work jointly in Committee for Monetary, Financial and Balance of Payments statistics (CMFB) - operational cooperation

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Governance of European statistics (2)

Legal framework for European statistics (1/2)

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Financial Vehicle

Corporations

Legal framework for European statistics (1/2)

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Article 338 of TFEUArticle 338 of TFEU

2533/98)2533/98)

Legal infrastructure

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ECB legal instruments concerning statistics

• Regulation – directly imposes obligations on reporting agents in euro area

• Guideline – imposes obligations on Eurosystem (including ECB)

• Recommendation – informs statistical authorities other than central banks in euro area of ECB requirements; not legally binding

• Decision – imposes obligations on addressees; can also be without addressees

• Notice – to inform/explain

• Opinion – expression of ECB view, usually in response to a consultation under Treaty/Statute

Also Memorandum of Understanding – its nature and status

ECB-UNRESTRICTED

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Brief overview of ECB statistics

• MFI (banking) balance sheets; monetary aggregates and counterparts

• MFI interest rates

• Securities issues

• Other (non-monetary) financial intermediaries

• Financial markets

• Payment systems

• Balance of payments

• International investment position

• Other external statistics

• Government finance

• Euro area integrated institutional sector accounts

NB: ECB uses also many statistics from sources outside ESCB/Eurosystem (prices/costs, national accounts, labour market statistics, etc.), and thatresponsibility for some of the above is shared with Eurostat

[MFI = monetary financial institution]

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Who does what in ESCB/Eurosystem

Article 5 ( Statute): “… the ECB, assisted by the national central banks, shall collect the necessary statistical information […] The national central banks shall carry out, to the extent possible, the task[s]…”

• NCBs: - Collection of data from reporting agents, other national statistical authorities, other national sources

- All contact with reporting agents/representative bodies- Compilation and publication of national aggregates/contributions to euro

area aggregates

• ECB: - Collection of data from other Community/international sources (e.g. Eurostat, BIS)

- Compilation and publication of euro area aggregates

• Shared: - Conceptual/development work, development of legal/technical infrastructure

(ECB in lead)- Participation in Community/international statistical committees

NCBs perform many of their tasks in accordance with ECB Guidelines. NCBs have responsibility for meeting the ECB’s requirements.Though there are instances of specialisation, all Eurosystem NCBs contribute to statistical work in broadly the same way.

[BIS = Bank for International Settlements ( Basel)]

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• System of National Accounts (1993) and other Manuals

– IMF Balance of Payments Manual, 5th edition (1993)

– IMF Monetary and Financial Statistics Manual (MFSM 2000)

– IMF Government Finance Statistics Manual (GFSM 2001)

• European System of Accounts (1995)

… complemented by legal definitions, compilation guides andmanuals, at international and European level

• ECB Statistics is currently implementing the new standards SNA 2008; ESA 2010; BPM 6

Complying with international statistical standards

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Compiling euro area aggregates

• Usual approach – build from national contributions.

• Importance of harmonisation of the national contributions.

• Some euro area aggregates are a simple sum of (harmonised) national data, but some not.

• National money stock commonly includes deposits held by residents with banks located in the country concerned. Euro area money stock includes deposits held by residents of all euro area countries with banks (MFIs) located anywhere in the euro area– it exceeds the sum of national money stocks by the amount of cross-border

depositing within the euro area.

• National balance of payments statistics measure all cross-border transactions of residents of the country concerned

– the b.o.p. of the euro area excludes cross-border transactions within the euro area

– gross flows in the euro area b.o.p. fall short of the sum of national b.o.p. flows by the amount of these cross-border flows within the area

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National and euro area monetary aggregates

In German M3 In neither German nor Austrian M3 In Austrian M3

Deposits held by Deposits held by Deposits held by Deposits held by Germans with MFIs Germans with MFIs Austrians with MFIs Austrians with MFIs in Germany in Austria in Germany in Austria

All the above are components of euro area monetary aggregatesI----------------------------------------------------------------------------------------------------------------------------I

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Reference reporting population for ECB statistics

• Central banks, other MFIs

• Other (non-monetary) financial intermediaries

• Post office giro institutions

• Entities holding cross-border positions or carrying out cross-border transactions

• Issuers of securities or e-money

The reference reporting population is confined to entities resident in the euro area (but the ECB may collect from them consolidated data which includes information relating to their branches outside the euro area).

This is all set out in Community legislation Regulation No 2533/98 - notable amendment here in No 951/2009 is extension of reference reporting population to include insurance corporations and pension funds.

Monetary and financial statistics

• Monetary and financial statistics

• Monetary aggregates and counterparts, minimum reserves• Interest rates, securities issues• Investment funds• Financial Vehicle corporations• Insurance corporations and pension funds• Financial soundness indicators, financial integration indicators• Financial stability statistics, of which Consolidated Banking Data• Financial market statistics - yield curve, PDFs -

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Council Regulation 1096/2010: The ECB has to provide statistical support to the European Systemic Risk Board (ESRB)

Main sources of data for the ESRB are: Data exchange with the European Supervisory Authorities

(EBA, ESMA, EIOPA) Statistical support from the ECB/ESCB Commercial data providers and other datasets Ad-hoc surveys

ECB, STC and its working groups involved actively in several workstreams

Examples: identify main datasets for the ESRB; • setting up the White Book, Risk Dashboard, Analysis of

National Banking Systems; • help shaping the data flows between the ESCB and the

European System of Financial Supervisors

ECB statistical support for the ESRB

Financial stability: ESRB Risk Dashboard

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Average systemic risk contribution of individual institution to overall risk using

CoVar (EU banking syst.)

Composite indicator of systemic stress (CISS)

Domestic credit-to-GDP ratio

Actual and forecasted GDP growth

Households debt to gross disposable income

Real estate comm. property, market size over GDP

Global risk aversion indicator

Price/earning ratio

EU large banks: Leverage ratios

Bank liabilities structure (annual growth rates for EA)

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External statistics

Euro area balance of payments and international investment position - including international reserves

• Monthly balance of payments

• Quarterly breakdown by main partners

• International investment position (balance sheet) and link to balance of payments

Nominal and real effective exchange rates of the euro

The geographic breakdown of the euro area current and capital account, international investment position and trade in goods is published in the ECB Monthly Bulletin

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Government Finance statistics

Protocol on the EDP: 3% and 60% of GDP as reference values for government deficit and debt reserves

Complete set of government accounts (revenue, expenditure, debt and deficit-debt adjustment) providing an integrated overview of the government balance and debt in annual frequency

Fiscal discipline is essential for the stability of the euro

• keeping price stability: direct (e.g. VAT) and indirect effects (wages)

• containing inflation expectations: rising government debt may lead to pressure on the ECB to tolerate higher inflation to erode the real value of debt

• keeping financial markets stable: interest rate on government debt in one country is affected by the evolution of other countries deficits and debts quarterly breakdown by main partners

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Euro area accounts

Complete description of euro area economic and financial developments: whole economy and by institutional sector (financial and non-financial corporations, households and government, rest of the world)

Integrates monetary, financial and economic statistics

Consistent statistical basis for quarterly economic analysis, with integrated non-financial accounts and financial accounts

Enables analysis of interrelations between key macro-economic policy indicators (e.g. household saving rate, indebtedness and changes in wealth; entrepreneurial income of non-financial corporations; government debt)

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EAA by Institutional sectors

GS S1 S1N S11 S12 S13 S14_5 S2 GS S1 S1N S11 S12 S13 S14_5 S2

B1G Value Added/GDPD1 Compensation of Employees

D21-D31 Taxes less subsidies on productsD29-D39 Other Taxes less subsidies on production

D4 P roperty IncomeD5 Taxes on income and wealthD61 Social security contr.D62 Social security benefitsD7 Current transfersD8 Equity attr to policy holdersD9 Capital TransfersK1 Consumption offixed capitalK2 Acq .-disp. of non-prod non-fin assetsP 3 F inal consumptionP 5 Gross Capital FormationP 6 ExportsP 7 ImportsB9 Net lending

B9F Net lendingF1 SDR and M onetary Gold

F2-4 Currency, Deposits, LoansF3 Securities oth. Than sharesF5 SharesF6 Insurance technical reservesF7 Oth. accs receivable/payable

Euro area accounts Uses ResourcesTransactions

S1 Total EconomyS11 Non-financial corporationsS12 Financial corporationsS121+S122 Monetary Financial InstitutionsS123+S124 Other Financial Institutions + fin. aux.S125 Insurance Corp and Pension FundsS13 General GovernmentS14+S15 Households and NPISHS2 Rest of the World

Instititutional Sectors

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For whom to whom: long term loans

TransactionsS11 S12K S12P S125 S13 S1M S2 SD

TOTAL 40.3 -75.5 -0.2 29.1 27.8 -46.3S11 7.7 27.4 -1.6 0.0 0.1 0.2 -18.4 0.0S12K 58.7 24.6 5.2 -0.4 13.4 18.2 -2.3 0.0S12P -61.2 -50.9 -13.9 0.1 18.9 10.4 -25.8 0.0S125 5.1 3.7 0.0 0.3 0.6 1.4 -1.0 0.0S13 1.6 0.7 0.0 0.0 -0.8 0.6 1.2 0.0S1M 0.0 0.4 0.0 0.0 0.0 -0.4 0.0 0.0S2 -36.6 34.3 -65.2 -0.1 -3.1 -2.5 0.0SD 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other ChangesS11 S12K S12P S125 S13 S1M S2 SD

TOTAL -5.1 -44.5 -1.5 -2.7 -0.1 -22.3

S11 -3.6 3.5 0.0 0.0 0.0 0.0 -7.2 0.0S12K -17.2 -5.0 1.6 -1.4 -7.6 -0.8 -4.0 0.0S12P -21.7 7.6 -17.5 -1.1 -0.6 0.2 -10.3 0.0S125 -0.9 -0.2 0.2 -0.4 0.0 0.0 -0.4 0.0S13 -0.4 0.0 0.0 -4.7 4.5 0.2 -0.4 0.0S1M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0S2 -32.3 -11.0 -28.8 6.2 1.0 0.3 0.0SD 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Outstanding AmountsS11 S12K S12P S125 S13 S1M S2 SD

TOTAL 5723.0 706.8 78.7 1095.3 5372.1 1743.6S11 1464.1 787.4 17.1 0.2 17.9 14.5 627.0 0.0S12K 9765.5 3618.4 425.9 24.5 810.9 4593.6 292.1 0.0S12P 1674.0 427.3 194.3 10.4 31.2 248.6 762.2 0.0S125 309.1 51.3 8.7 30.4 75.4 112.1 31.2 0.0S13 357.1 174.9 0.2 2.1 104.7 43.9 31.2 0.0S1M 49.5 28.2 0.0 0.0 0.0 21.3 0.0 0.0S2 1100.1 635.3 60.6 11.1 55.1 338.0 0.0SD 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Liabilities

Ass

ets

Liabilities

Ass

ets

Liabilities

Ass

ets

General economic statistics

• Other European statistics used by the ECB (Eurostat primary responsibility):

• Harmonised Index of Consumer Prices (HICP)

• GDP

• Business indicators: industrial production, retail trade, etc.

• Employment, unemployment, labour costs, etc.

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ESCB Statistics Committee (STC) and its Working

Groups are at the core of the production of ECB

statistics

ESCB Statistics Committee (STC)

ECB Executive Board

ECB Governing and General Councils

WG on Monetary

and Financial Statistics

WG on Euro Area

Accounts

WG on External Statistics

WG on General

Economic Statistics

WG on Government Finance Statistics

WG on Statistical

Information Manageme

nt

WG on Securities Statistics

Decision-making bodies for ECB statistics

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