Consolidation in the French financial accounts Banque de France Dominique Durant Consolidation in the French financial accounts OECD Working Party on Financial Statistics 6-7 October 2003

Implementation in the French financial accounts Outlines France follows as far as possible the ESA95 regulation and Eurostat’s recommendations Implementation in the French financial accounts General remarks Consolidation by operation Consolidation by sector and sub-sector Results of the consolidation in 2001 (semi-final) Asset side Liability side Foreseen improvements Conclusion

1. France follows as far as possible the ESA95 regulation and Eurostat’s recommendations As a matter of principle, flows and stocks between constituent units of sectors and sub-sectors are not consolidated. For reason of comparability, non consolidated data should be based on a complete picture of all financial transactions, assets and liabilities. A definition of consolidation (art. 1.58). Consolidation rules apply at the sector and sub-sector level.

2. Consolidation in the French financial accounts a. General remarks Consolidated accounts are available : for stocks, transactions, revaluations and other changes in volume. only in a semi-final and final version, not yet in a provisional version. at sector level (S11, S12, S13, S14-15), sub-sector level (S121, S122, S123, S124, S125, S1311, S1313, S1314, S14A, S14B, S15) and some national subdivisions of sub-sectors. The sector’s consolidated accounts do not equal the sum of the corresponding consolidated sub-sector’s accounts. Consolidation has impact, neither on the “Rest of the world” nor on net financial worth.

2. Consolidation in the French financial accounts b 2. Consolidation in the French financial accounts b. Consolidation by operation A full consolidation is highly demanding concerning the information on counterpart sector/sub-sector according to ESA95 classification. So far, long-term securities are not consolidated, because the information on holders of securities issued is not sufficient. There is no room for consolidation, when the operation involves “by nature” two different sectors. For all other operations, the information on counterpart is either collected, or estimated and included in the financial account database.

2. Consolidation in the French financial accounts c 2. Consolidation in the French financial accounts c. Consolidation by sector and sub-sector The accuracy of consolidated data depends on the quality of the information available for the individual units included in the sector/sub-sector: the quality is high (individual balance sheets with information on counterpart sectors) for general government and financial institutions excluding financial insurance companies and financial auxiliaries the quality is medium (aggregated balance sheets without information on counterpart sectors) for insurance corporations and non-financial corporations the quality is low (counterpart information only) for financial auxiliaries, households and non profit institutions serving households. For these sectors/sub-sectors, no consolidation is made.

3. Results of consolidation in 2001 (semi-final) a. Asset side INTRA-SECTOR OPERATIONS IN % OF NON CONSOLIDATED ASSETS %   SECTORS S100000 S110000 S120000 S130000 S141500 S200000 TRANSACTIONS F10000 MONETARY GOLD AND SDRs F20000 CURRENCY AND DEPOSITS 69 60 F30000 SECURITIES OTHER THAN SHARES AND DERIVATIVES 16 19 F40000 LOANS 54 5 39 F50000 SHARES AND OTHER EQUITY F60000 INSURANCE TECHNICAL RESERVES 100 F70000 OTHER ACCOUNTS RECEIVABLE OR PAYABLE 61 35 1 F90000 NET WORTH F98000 TOTAL 20 24 23 Source : Banque de France Updated 10 September 2003 471421 DESM SESOF Tél. : + 33 01 42 92 nn nn Fax : + 33 01 42 92 27 52 S100000 : RESIDENT TOTAL ECONOMY S130000 : GENERAL GOVERNMENT S110000 : NON-FINANCIAL CORPORATIONS S141500 : HOUSEHOLDS AND NPISH S120000 : FINANCIAL INSTITUTIONS S200000 : REST OF THE WORLD

3. Results of consolidation in 2001 (semi-final) b. Liability side INTRA-SECTOR OPERATIONS IN % OF NON CONSOLIDATED LIABILITIES %   SECTORS S100000 S110000 S120000 S130000 S141500 S200000 TRANSACTIONS F10000 MONETARY GOLD AND SDRs F20000 CURRENCY AND DEPOSITS 39 55 F30000 SECURITIES OTHER THAN SHARES AND DERIVATIVES 32 1 F40000 LOANS 24 15 F50000 SHARES AND OTHER EQUITY F60000 INSURANCE TECHNICAL RESERVES F70000 OTHER ACCOUNTS RECEIVABLE OR PAYABLE 62 63 46 F90000 NET WORTH F98000 TOTAL 20 23 Source : Banque de France Updated 10 September 2003 471421 DESM SESOF Tél. : + 33 01 42 92 nn nn Fax : + 33 01 42 92 27 52 S100000 : RESIDENT TOTAL ECONOMY S130000 : GENERAL GOVERNMENT S110000 : NON-FINANCIAL CORPORATIONS S141500 : HOUSEHOLDS AND NPISH S120000 : FINANCIAL INSTITUTIONS S200000 : REST OF THE WORLD

4. Foreseen improvements Consolidated provisional accounts will be the result of the future computerised production of full quarterly financial accounts. To consolidate long-term securities, the reshaping of the survey conducted on resident custodians is foreseen in order to complete the information on holders of securities.

5. Conclusion The data used for consolidation, namely the information on counterpart sector, may enhance the quality of the financial accounts. However, the costs that may be incurred in the collection of such information should be compared with the potential benefits.