1. Financial services explicitly charged and other financial services
Richard McCrae
Balance of Payments
Office for National Statistics, UK

2. Financial institutions
Financial services transactions are recorded by type of financial institution:
Fund managers
Securities dealers
Baltic Exchange
Monetary financial institutions
Other financial institutions

3. Fund Managers
Information on investment management fees and fees generated from advisory and other related functions are collected via the International Trade in Services (ITIS) survey.
Quarterly sample – approx. 2,200 businesses
Annual sample – approx. 16,000 businesses.
The sample for the ITIS survey has been almost doubled and re-optimised with the aim of improving industrial and geographical data.

4. Securities dealers
The earnings of securities dealers are derived from an ONS survey.
Security dealers’ earnings include:
Commissions and fees charged
Net spread earnings
A sample of 20 securities dealers account for 95% of the total activity.
Latest review implemented from 2016Q1

5. Baltic Exchange
The Baltic Exchange reports the brokerage and other service earnings by members of the Exchange for chartering, sales and purchases of ships and aircraft and other associated activities.
Estimates are based on a survey of Exchange members.
ONS are currently reviewing this data with the Baltic Exchange.

6. Monetary financial institutions
The Bank of England (BoE) conducts a quarterly survey of banks and building societies.
The survey collects data on:
Commissions and fees
Spread earnings on foreign exchange, securities and derivatives transactions.
ONS and BoE have a rolling review of existing data sources and methods:
The latest improvement is being made to the net spread earnings data to account for underreporting.

7. Other financial institutions
ITIS Survey collects data for other financial institutions financial services.
Money market brokers – ONS produce estimates based on the Bank of England’s data on activity in financial markets. BoE data is supplied monthly, quarterly and annually.

8. Reducing asymmetries - Approach
So far we have focussed on services as the asymmetries are larger, services are harder to measure and the data sources are not as strong as for goods.
Prioritised two countries and published initial findings: US and Ireland.
Germany, China, France, Netherlands, Belgium and Luxembourg also identified as priorities for future work.

9. Definitional differences
US exports minus UK imports, 2016 ($bn)
US imports minus UK exports, 2016 ($bn)
FISIM included in services by ONS, implicitly in income by BEA
-1.3
-2.6
Net spread earnings included by ONS, not by BEA
n/a
-3.9
Manufacturing services included by ONS, in goods by BEA
-0.1
-0.2
Construction imports related to work done in US included by ONS, not by BEA
Outright sales/purchases of franchises and trademarks included in services by BEA, in capital account by ONS
0.1
+0.0
Total currently identified
-1.4
-6.6
Total asymmetry
25.5
-18.9

10. Next steps Investigating new data sources for some service types.
Continue asymmetry discussions with US and Ireland, particularly around data sources and compilation methods.
Continue and expand engagement with other priority countries.
Next article to be published later this year.

11. Thank you.
Any questions?