FantasticSearch

The output of the subsectors S122 (other financial institutions) and S123 (other financial intermediaries excluding insurance corporations and pension funds), except investment funds is valued on the basis of the difference between the actual rates of interest payable and receivable and a “reference” rate of interest. For those to whom the intermediaries lend funds, both resident and non-resident, it is measured by the difference between the effective interest charged on loans and the amount that would be paid if a reference rate were used. For those from whom the intermediaries borrow funds, both resident and non-resident, it is measured by the difference between the interest they would receive if a reference rate were used and the effective interest they actually receive;

(c) financial intermediation services provided by the central bank. The central bank must not be included in the calculation of FISIM: its output is measured as the sum of costs.’ 3.70(j) Delete: Replace by: ‘only for the total economy: all financial intermediation services indirectly measured (FISIM) provided by resident producers.’

‘The value of the services provided by financial intermediaries not being allocated among different customers, the actual payments or receipts of interest to or from financial intermediaries are not adjusted to eliminate the margins that represent the implicit charges made by financial intermediaries. An adjustment item is needed in the allocation of primary income account of financial intermediaries and of a nominal industry to which, by convention, the whole output of financial intermediaries is allocated as intermediate consumption.’

‘The value of the services provided by financial intermediaries being allocated among different customers, the actual payments or receipts of interest to or from financial intermediaries need to be adjusted to eliminate the margins that represent the implicit charges made by financial intermediaries. The amounts of interest paid by borrowers to financial intermediaries must be reduced by the estimated values of the charges payable, while the amounts of interest receivable by depositors must be similarly increased. The values of the charges are treated as payments for services rendered by financial intermediaries to their customers and not as payments of interest.’ Chapter 8 8.09. EXPLANATORY NOTE Add to figures presented: Tables A.I.1 and A.I.2, to show the consequences of allocation of FISIM on figures presented in the chapter 8, ‘Sequence of accounts and balancing items’ (numerical example).

8.14. Delete: Replace by:

‘As financial intermediation services indirectly measured (FISIM) are not allocated to user sectors, the whole of the value of the output of FISIM is treated as the intermediate consumption of a nominal sector with zero output and negative value added equal in size but opposite in sign to intermediate consumption. In this way, the value added of all sectors and industries together is reduced in total by this amount. To lighten the presentation of accounts, it is possible not to insert a supplementary column for the nominal sector, but instead to take into account the corresponding figure in the column total economy.’ ‘As financial intermediation services indirectly measured (FISIM) are allocated to user sectors, certain parts of interest payments are reclassified as payments of services. This reclassification has consequences for the values of output and intermediate consumption (as well as for the values of imports, exports and final consumption).’ 8.24. Delete: Replace by:

‘As financial intermediation services indirectly measured (FISIM) are not allocated to user sectors, the entries shown for interest are those for actual interest payable and receivable. An adjustment is made to resources in the column financial corporations (with a negative sign) and in the column nominal sector (with a positive sign). To lighten the presentation of accounts, it is possible not to insert a supplementary column for the nominal sector, but instead to present the corresponding figure in the column total economy.’ ‘As financial intermediation services (FISIM) are alloced to user sectors, the item “interest” in the allocation of primary income account corresponds to interest payable and receivable after FISIM has been deducted from actual payables by borrowers and added to actual receivables by lenders.’ Chapter 9 9.25(a) Delete: ‘the intermediate consumption by industry includes the use of financial intermediation services indirectly measures that are recorded in a nominal industry (see paragraph 9.33);’ 9.25(b) Delete: ‘minus the use of financial intermediation services indirectly measured (recorded in a nominal industry, see paragraph 9.33.)’ 9.33. Delete:

‘Throughout the supply and use tables, the NACE REV 1 industry classification is extended with a nominal industry for the use of financial intermediation services indirectly measured. In the supply table, no transactions are recorded at all for this industry. In the use table, that total use of financial intermediation services indirectly measured is recorded as the intermediate consumption of this nominal industry. As this nominal industry does not have any other transactions, its net operating surplus is negative by the amount of its intermediate consumption; all other components of its value added are zero. As a consequence, its total gross value added is equal to its (negative) net operating surplus.’

AMENDMENTS TO ANNEX A AND ANNEX I THERETO OF REGULATION (EC) No 2223/96 Chapter 1 1.13, fifth paragraph, (d) Delete after‘The ESA also contains many specific conventions, e.g.:’: Replace by: ‘recording the use of financial services indirectly measured as the intermediate consumption of a nominal sector or a nominal industry.’ ‘allocating the use of financial intermediation services indirectly measured (FISIM) to user sectors/industries.’ 1.25, second paragraph Add after the list of points introduced by‘Some of the major differences in concepts are:’the following point: ‘(i) the use of financial intermediation services indirectly measured (FISIM) is now allocated to user sectors/industries instead of to a nominal sector (industry). As a consequence, the use of FISIM is not anymore by convention recorded entirely as intermediate consumption, but can also be final consumption and exports. This implies then that imports of FISIM can also occur.’ Chapter 3 3.63 Delete all the text from the beginning until‘… is valued on the basis of the fees of commissions charged’ included, at the end of the fourth paragraph. Replace by:

‘J. Financial intermediation services (this includes insurance services and pension funds services) (a) financial intermediation services directly charged by financial intermediaries to their clients and measured as the sum of fees and commission charged. Financial intermediaries can charge explicitly for the intermediation services which they provide. The output of such services is valued on the basis of fees and commissions charged;

(b) financial intermediation services indirectly charged and indirectly measured (FISIM). Financial intermediaries provide services for which they do not charge explicitly fees and commissions. They pay lower rates of interest than would otherwise be the case to those who lend them money and charge higher rates of interest to those who borrow from them. Consequently, FISIM output is generated by the management by financial intermediaries of loans and deposits whose rates they control; in contrast, there is no intermediation service for securities other than shares.

‘the use of financial intermediation services indirectly measured by resident producers.’ 3.70. Add: ‘(k) By convention, the central bank output should be entirely allocated to the intermediate consumption of other financial intermediaries (subsectors S122 — S123).’ 3.76(e) Add to‘financial services directly charged;’: ‘and the part of financial intermediation services indirectly measured used for final consumption purposes by households;’ 3.142(h) Add immediately after‘financial services by the amount of the explicit commissions and fees;’ the phrase: ‘and the part of financial intermediation services indirectly measured used by non-residents;’ Chapter 4 4.51, second paragraph Delete: Replace by: