1. Monetary & Financial Statistics Division November 2005 © Bank of England The statistical treatment of securitisation vehicles Bank of England comments on the draft of chapter 4 of SNA Rev1 OECD Working Party on Financial Statistics, 2-3 October 2007

2. Monetary & Financial Statistics Division November 2005 © Bank of England Is it always appropriate to treat SPEs as separate institutional units? Economic reality versus legal form SPEs often have - no employees / production activity - little or no autonomy - balance sheets not economically meaningful (if assets not derecognised) IMF CG (3.112) recommends consolidation of some SPEs

3. Monetary & Financial Statistics Division November 2005 © Bank of England Bank of England interest in SPEs Are SPEs “money-holders” or “money- creators”? - Project to redefine UK broad money. Additional volatility in bank credit data

4. Monetary & Financial Statistics Division November 2005 © Bank of England Recommendations Review and clarify the SNA Rev1 designation of SPEs as institutional units (4.48-4.54) Consider instead a definition of SPEs as artificial subsidiaries - not for SPEs in other jurisdictions Promote wider international debate about the implications of asset securitisation for monetary and financial statistics

5. Monetary & Financial Statistics Division November 2005 © Bank of England For discussion The WPFS are invited to: 1.Review the arguments set out in the paper; 2.Comment on any comparisons with securitisation activity in their own countries; 3.Consider whether and how tests should be established for the institutional status of securitisation SPEs