1. Sectors and sub-sectors
Martin Kellaway
National Accounts in Practice – Advanced course
Luxembourg, 2-11 October 2017
THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

2. Institutional sectors
Why do sector accounts?

3. Institutional sectors
– Non-financial corporations S.11
– Financial corporations S.12
– General government S.13
– Households S.14
– Non-profit institutions serving households S.15
– Rest of the world S.2
What is the most important sector?

4. Non-financial corporations (S.11)
Principally engaged in production of market goods and non-financial services
Private corporations
co-operatives and partnerships
public market producers recognised as separate units
non-profit institutions serving NFCs
head offices controlling a group of NFCs
SPEs
quasi-corporations
S Public NFCs
S National private NFCs
S Foreign controlled NFCs

5. Financial corporations S.12
Financial corporations are ‘market producers’, whose principal activity is the production of financial services (including financial quasi-corporations)
Such institutional units comprise all corporations and quasi-corporations which are principally engaged in:
Financial intermediation (financial intermediaries); and/or
Auxiliary financial activities (financial auxiliaries)

6. Financial corporations S.12
Financial intermediation is a process of channelling funds between parties with a surplus and those with a lack of funds.
Auxiliary financial activities are activities related to financial intermediation but which do not involve financial intermediation themselves, e.g. head offices, brokers, fund managers

7. Financial corporations S.12 sub-sectors
(a) central bank (S.121)
(b) deposit-taking corporations except the central bank (S.122)
(c) money market funds (MMFs) (S.123)
(d) non-MMF investment funds (S.124)
(e) other financial intermediaries, except insurance corporations and pension funds (S.125)
(f) financial auxiliaries (S.126)
(g) captive financial institutions and money lenders (S.127)
(h) insurance corporations (S.128)
(i) pension funds (S.129)

8. General government S.13 Produces non-market services
for individual and collective consumption
Redistributes income or wealth
Sub-sectors
Central government (S.1311)
State government (S.1312)
Local government (S.1313)
Social security funds (S.1314)

9. Households
S.14
Consists of individuals, or groups of individuals (living in households or institutions), as consumers, or
as entrepreneurs, producing market goods and
non-financial and financial services (market producers) provided that the production of goods and services is not by separate entities treated as quasi-corporations.
It also includes individuals or groups of individuals as producers of goods and non-financial services for exclusively own final use

10. Non-profit institutions serving households S.15
Non-profit institutions serving households (NPISHs) consist of non-profit institutions that are:
separate legal entities
serve households
privately-controlled non-market producers
resources mainly voluntary contributions
Examples are: trade unions, political parties, churches, charities; some hospitals & universities

11. Rest of the world
S.2
Consists of non-resident units insofar as they are engaged in transactions with resident institutional units or have other economic links with resident units
= non-residents’ transactions with our economy
S.21 Member States (S.211) and institutions and bodies (S.212) of the EU
S.22 Non-member countries and international organisations non-resident of EU

12. Criteria for sector classification
To classify a unit, the following questions should be asked:
Does it have autonomy of decision making?
Does/can it produce accounts?
Is it a market producer?
Any special rules that over-ride the general approach
Also:
If it doesn’t have autonomy and
has a different behaviour from its ‘parent’:
it can be deemed to have autonomy to enable the activity to be captured separately

13. Allocation of units
to sectors