Methodological notes on the publication 'Financial assets and liabilities of the households sector (transactions and balances) by the type of financial instruments'
The publication Financial assets and liabilities of the households sector (transactions and balances) by the type of financial instruments provides part of the information on the households sector’s balances and transactions in the context of financial assets and liabilities. It’s a part of the sectoral balances and financial accounts of the System of National Accounts of the Russian Federation for the households sector formed by the Bank of Russia in accordance with Clause 16.1 of Article 4 of Federal Law No.
The data on financial assets and liabilities of the households sector are published on a quarterly basis in accordance with the Official Statistics Release Calendar. In addition, the data on financial assets and liabilities of the households sector are published on a monthly more significant by the type of financial instruments.
The publication Financial assets and liabilities of the households sector (transactions and balances) presents data on financial assets and liabilities of households broken down by financial instruments that are used for analysing the dynamics and structure of households’ savings.
1. Methodological principles for compiling indicators of financial assets and liabilities of the households sector
The System of National Accounts 2008 (SNA 2008) is the methodological basis for the compiling financial assets and liabilities of the households sector.
According to the SNA 2008, the balances of financial assets and liabilities show stocks of financial assets and liabilities at a certain moment in time. Asset value at a certain moment in time changes each time in accordance with a transaction, price change, or any other change influencing the amounts of assets and liabilities.
The balances of financial assets and liabilities denominated in foreign currency are converted into domestic currency at the exchange rate as of the last business day of the reporting period.
Transactions are economic flows between institutional units that occur by mutual agreement. Transactions with financial assets and liabilities denominated in foreign currency are converted into domestic currency at the average exchange rate in the period transaction period. As a rule, transactions are valued at the market price. In case of lack of information, indirect methods are used to value transactions.
The households sector’s transactions with non-traded shares and other non-resident equity and investment fund shares are measured in accordance with methodological approaches of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) and are presented in the balance of payments. The households sector’s transactions with non-traded shares and other non-resident equity and investment fund shares with resident institutional units are not classified as foreign securities transactions.
In the absence of data on transactions and the balances of financial assets and liabilities of the households sector, these indicators are determined by the residual method based on known total amounts across all economic sectors.
Methodology of formation for financial assets and liabilities related to the households sector might be a subject to change due to development of methods and approaches to estimate given indicators within the process of harmonisation of SNA. Nevertheless, methodology can be updated due to the process of realisation of recommendations proposed within the second phase of the G20 Data Gaps Initiative.
Definition of the households sector corresponds to Appendix B ‘Classification of institutional sectors of the economy’ of the All-Russian Classification of Forms of Incorporation OK
An institutional unit is an economic entity that is capable, in its own right, of owning assets, incurring liabilities and engaging in economic activities and in transactions with other entities (SNA 2008: 4.2). Institutional units are grouped into sectors and subsectors.
The households sector includes institutional units consisting of one individual or a group of individuals, including individual entrepreneurs.
2. Classification of financial instruments
The classification of financial instruments is for compiling the indicators of financial assets and liabilities relating to households’ investments in financial instruments. It is developed in accordance with the SNA 2008 methodology.
Currency consists of notes and coins issued by central banks. Currency may only be the liability of the subsector ‘Central bank’ (domestic currency) and the Rest of the world (foreign currencies). Foreign exchange operations by households include buying/selling from residents and non-residents.
Transferable deposits comprise the balances of the households’ sector funds in settlement, current and other demand accounts (including bankcard accounts) are opened in current banks nominated in rubles, deposits and amounts on credit institutions’ accounts which cannot be used during a certain period according, including deposits of banks with revoked licenses.
Other deposits include the balances of the households’ sector funds in operating credit institutions in time deposit accounts and other funds nominated in rubles held for a fixed term, all types of foreign currency deposits, precious metal accounts also accrued interest on deposit transactions, deposits and amounts on credit institutions’ accounts which cannot be used during a certain period according, including deposits of banks with revoked licenses.
Deposits with non-resident banks comprise the households sector’s balances of funds in settlement, current and other demand accounts (including bankcard accounts) in time deposit accounts in foreign currency opened with non-resident banks.
Broker accounts of households comprise unspent balance of funds, owned by Household sector, in the broker account of professional securities market participants (both banks and non-bank financial institutions). Broker accounts are intended to keep the record of transactions in the following instruments: precious metals, securities, foreign currency, derivatives made by broker under the brokerage contract.
Debt securities comprise bonds, bills, savings certificates, certificates of deposit, depository receipts for bonds and other debt securities. Debt securities give their holders the right to receive contractually determined payments on a specified date. Transactions in debt securities include issuance, redemption, purchase and sale.
Loans are financial assets that are created when funds are directly provided to the borrower by the lender and are certified by non-negotiable documents. This category covers all loans including overdraft facilities, except receivables/payables. Loans in financial liabilities of the households sector include, among other things, loans and financial claims, in particular mortgage loans, car loans, consumer loans, other loans, accrued interest claims, repurchased by mortgage agents and accounted for repayment.
Equity and investment fund shares consist of shares, including investment funds’ equity, depositary receipts for shares, investment units of unit investment funds and other equity. Listed shares are admitted for trading and included in Quotation lists (Level One and Level Two) on the Moscow Exchange. Listed non-resident shares mean shares with a market quotation for the three months preceding the reporting date. Shares and other equity represent the owner’s funds in the institutional unit. Consistent with BPM6 approaches, other holdings of non-residents’ equity include other capital investments (free aid, maintenance, consulting, personnel training, etc.), as well as cross-border investment in real estate considered as direct equity investment in a notional unit.
Insurance, pension and standardised guarantee schemes constitute life and non-life insurance reserves, as well as pension entitlements, in particular long-term savings agreements, and entitlements to non-pension benefits.
Other accounts receivables/payable include debt related to purchase and sale of securities, dividend payments, rent, wages, tax payments and payments for utility services, broker non-resident accounts transfers, as well as other debt.
Escrow accounts of households consist of currency in individuals’ accounts, opening for accounting operations under equity construction agreements or transactions for selling and purchasing real estate in accordance with the law of the Russian Federation.
3. Expanded coverage
The publication Financial assets and liabilities of the households sector (transactions and balances) by type of financial instruments will be expanded as the information on other financial assets and liabilities becomes available.