Electronic Discussion on Consolidation - OECD Databases - SNA

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Electronic Discussion on Consolidation - OECD
Databases- SNA

Presentation to the OECD Working Party on
Financial StatisticsPatrick OHaganSystem of
national Accounts, Statistics CanadaOctober 9,
2006
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Background

• OECD WPFS 2005 Meeting
• Background papers on Consolidation
• Discussants comments
• Discussion summary notes

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• Consolidation in OECD FA and BSA Databases

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1. That the current WPFS initiatives with respect
to understanding consolidation practices in OECD
countries continue

• SUPPORTED. In particular, that the development
  of comprehensive methodological notes should have
  high priority (general view of the WPFS)
• EDG also provided a clear indication that
  consolidation issues in the OECD databases went
  beyond the need for documentation
• General consensus that more work is required

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2. That the discussion on intra-sector
consolidation be extended to include the
treatment of complex enterprises

• SUPPORTED. Clear recognition of the difficult
  issues surrounding complex enterprises and
  intra-sector consolidation
• Noted by discussants that FA and BSA source data
  are collected for domestic groups of companies
  (legal entities), or noted data problems with
  consolidated corporations source data.
• View that the treatment of complex enterprises
  should figure into our understanding and
  documentation of consolidated/non-consolidated
  data

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3. That efforts be extended incorporate the
requirements of related datasets ... useful to
develop a better understanding of policy/analytic
needs

• SUPPORTED. Consolidation is a cross-cutting
  issue, on which more work needed to be undertaken
  
• Emphasis on user needs (relevance) when it comes
  to data in OECD databases. Sense that (outside
  of government and depository corporations) there
  was little demand for consolidated data in their
  respective user communities.
• Concern over the relationships among the OECD
  databases and related databases elsewhere.
  Re-designed IMF-MFS are SNA93 based, but is it
  not always clear that the financial data are
  comparable problematic for users
• Noted that the IMF-FSI program is also focused on
  consolidated data, but from different
  perspectives than the OECD databases

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4a) That the current OECD requirement for both
unconsolidated and consolidated FA and BSA data
be re-considered by the WPFS

• SUPPORTED. Most countries produce one set of FA
  and BSA
• Concerns over what can be produced vs what is
  being requested in OECD (other) financial
  accounts databases
• Sense that countries can neither present fully
  unconsolidated or fully consolidated data that
  financial data, by its nature often reflects a
  mixture of consolidation, especially at the
  sub-sector level. brings into question the
  analytical usefulness (relevance) and accuracy
• Concerns that statisticians are coming under
  increasing pressure to deliver data for purposes
  other than the original uses of FA and BSA
• Feasibility Burden on the respondent OECD
  countries constraints countries face in
  modifying their statistical systems

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4b) Return to a one database submission,
consistent with the published data of most
countries. Sub-sectors as is sectors
unconsolidated, with consolidated sectors
submitted as supplementary information

• SUPPORTED. Generally felt that the main OECD
  databases should be SNA93 based (that is,
  unconsolidated). Submissions linked to the core
  countries financial accounts. Supporting
  metadata essential to international comparisons
• Strong support for providing consolidated sector
  data for 2 key sectors Government and
  depository corporations. In both of these cases,
  there is a clear user demand, and sufficient
  detail
• Sense that a certain degree of estimation would
  be acceptable in producing consolidated data
• Suggestion That OECD databases could be expanded
  to include counter-party information, where it
  exists

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5. That the WPFS plan to make a substantial
contribution to the next round of revisions to
SNA, where aspects of income (including
consolidation and complex enterprises) will be a
major review item

• SUPPORTED

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• Consolidation in SNA

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1. That the SNA93 principle that in general the
accounts of the system are not consolidated stand
underlines the primary roles of the FA and BSA
in the overall core SNA

• SUPPORTED. Recognition that financial accounts
  (and, more generally, national accounts) are
  based on user needs, and the user communities in
  the respective countries have not requested
  consolidated data
• Some of the recent increased demands for
  consolidated data from international agencies
  seem go beyond macro-economic analysis as
  articulated in the SNA sense that the SNA
  cannot be all things

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2. To emphasize in SNA that, for certain types of
analysis (e.g., government sector deficit/debt),
consolidated sector accounts may be more
appropriate

• SUPPORTED. Contention that there was a
  significant macroeconomic demand for both
  consolidated and unconsolidated government sector
  data strengthen the link of the core accounts
  with the new SNA government-public sector chapter
  (GFSM)
• There was also support for a degree of
  consolidation in the financial corporations
  sector, in particular for depository
  corporations, where the need is also evident
• Less support for a consolidated financial sector.
  Feedback on this paper from ISWGNA indicated
  that there seems to be a need for such data and
  that the SNA emphasize this specific need.

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3. That SNA general position against netting of
financial instruments be retained however, some
degree of netting as an extension/approximation
to consolidation

• SUPPORTED

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4. That consolidation be clarified with respect
to complex corporations proposed the current
definition of institutional unit be broadened to
also be represented by a consolidation of related
legal entity corporations

• Acceptance of the points made in the paper that
  SNA93 did not really deal with the issue of
  consolidation thoroughly no discussion of
  complex corporations
• Reluctance it to necessarily modify the
  definition of corporate institutional sector
  units to cover associated groups of legal
  entities.
• Sense that this was a difficult issue, and one
  that could be held over until the next round of
  SNA revisions. Feedback on this paper from
  ISWGNA With respect to broadening the definition
  of an institutional unit to include groupings of
  related corporate legal entities that the
  definition of an institutional unit has been
  discussed in the past and decided not to change
  it.

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5. That further debate on consolidated
enterprises could be deferred to the next round
of revisions to SNA, where aspects of income will
be a major review item

• Supported. Complex corporations figure
  prominently in income-side issues. The list
  could include, among other things, surplus,
  dividends, re-invested earnings, asset valuation
  and income, etc.
• Sense that the WPFS could play a major role in
  articulating and discussing such issues