1. Outcome of AEG Consultation on the Treatment of Negative Interest Rates
Eleventh Meeting of the Advisory Expert Group on National Accounts New York
5-7 December 2017
Michael Stanger

2. Background
A paper on the treatment of negative interest rates was circulated to the members of the AEG for consultation on 16 February AEG members provided comments and 4 responded with no comments.

3. 5.2.1 Summary of outcome of AEG consultation on the treatment of negative interest rates
In general, members agreed with the proposed treatment of negative interest rates as negative receipts of investment income.
This treatment is seen to:
be in line with the principles set out in existing manuals (e.g. parallel treatment of reinvested earnings on direct investment in BPM6)
be logical in that negative interest rates give rise to negative income flows and negative income flows are recorded with a negative sign in the appropriate side of the accounts
maintain the association between investment income and the related instrument
allow for more accurate rate of return analysis
better serve data needs for policy and analytical purposes

4. 5.2.1 Summary of outcome of AEG consultation on the treatment of negative interest rates
The consultation of negative interest rates has been closed. STA-BP received feedback from the AEG and Government Finance Statistics Advisory Committee agreeing with the views of BOPCOM, and posted a clarification note on the BPM6 website stating that: Negative interest rates on deposits should be recorded as negative income receivable by the investors (and payable by the financial institutions) in the primary income account excluding FISIM, like positive interest income on deposits.

5. 5.2.1 Summary of outcome of AEG consultation on the treatment of negative interest rates
Some AEG members noted that further more-in-depth research is needed to improve accounting guidance on this issue and with regard to its implication on FISIM:
Canada: considers the negative interest rather an explicit banking charge for safeguarding and access service
China: the SNA should reconsider the FISIM estimation approach with regard to the reference rate
NL: current proposal is pragmatic and further research is needed
Uruguay: further research is needed, specifically regarding implications on FISIM
USA: the treatment of negative interest highlights concerns about the suggested FISIM interbank rate.