ECBRESTRICTED FINAL Gabriel Quirs Head of Macroeconomics Statistics

ECB-RESTRICTED FINAL Gabriel Quirós Head of Macroeconomics Statistics Division European Central Bank Quarterly Integrated Euro Area Accounts Joint ECB NBRM Seminar on Statistics Skopje, 4 October 2013

Euro Area Accounts • Why: ECB as a key user of statistics • What are the EAA? • How: Integration of data sources • Results + Uses Annexes: 1 New ECB Guideline: Changes from 2014 2 Additional examples of uses 3 Links to data and publications 2

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ECB as key user of European statistics An evidence-based decision-making requires a large amount of high quality European statistics Primary objective of price stability (annual increase in HICP of close but below 2% over the medium term) Governing Council takes monetary policy decisions based on an overall assessment of the risks to price stability Economic analysis focusing on a wide range of economic and financial indicators (short to mediumterm risks to price stability) crosschecking Monetary analysis (medium to long-term trends in inflation) Economic and financial information 4

What are the EAA ? Synopsis of inputs + outputs National Financial Accounts Euro Area Building blocks : - Bo. P - MFI - IF + FVC - ICPF - GFS Integrated Euro Area Accounts Financia Nonl Financial Account s s Quarterly ECB Press Release on Economic and Financial Developments Quarterly Eurostat Press Releases on Household saving + Business Investment National non-financial accounts Other : Bo. P-euro area European Institutions (ECB, ESM) 5

What are the EAA? Giving Indicators an Accounting Framework GDP M 3 HH Consumption Gov Deficit Gov Debt 6

Integrating data sources: National data and euro area building blocks The euro area accounts integrate a large number of different data sources • Non-financial sector accounts • Financial accounts: The ECB “MUFA” Guideline • Building blocks: – Balance of Payments (Bo. P) – MFI Balance Sheet Items (BSI) – Quarterly Financial Accounts for General Government (QFAGG) 7 – …

The MUFA Guideline and building blocks Monetary Union Financial Accounts (MUFA) are compiled by combining national data - coming through the ECB MUFA Guideline - and euro area financial building blocks Which criteria are followed when deciding the source for each cell in the matrix ? – Data reliability – User needs and preferences – Minimize horizontal imbalances – Future development of the accounts, in particular in terms of timeliness 8

Data sources: National financial accounts and building blocks (BSI, BOP, QFAGG) 9

Uses – some example: Enriching monetary analysis Financial investment by households Annual growth rate • Value of analysing M 3 developments by institutional sector • Closer link between M 3 holdings by households and price developments (but headline M 3 still better predictor of turningpoints) 1) Excluding money market fund shares. *) Percentage point contributions to annual growth of financial investment. • Looking at M 3 against total financial investment / broader portfolio of assets • Role of OFIs and ICPFs for financial intermediation & 10

Integrating real and financial perspectives (NFC accumulation accounts : financing and investment) Percentage of GDP, four-quarter moving sum • Bulk of capital formation financed internally (gross saving)* • Role of equity financing modest (except 2000 -01) • Linked to financial investment / M&A • Resurgence of debt financing after consolidation • Reduction of debt financing in credit crisis * Internal financing (gross saving) includes retained earnings and consumption of fixed capital. It is broadly equivalent to earnings before depreciation but after 11

Changes in 2014: The new ECB MUFA Guideline New financial instrument and sub-sector details due to SNA 2008 and ESA 2010 • MUFA Guideline (quarterly), ESA TP (annual) and G-20 Financial accounts template are harmonised to a large degree Additional user needs for quarterly Euro Area Accounts • Publication of Euro Area Aggregates at t+90 => transmission of selected “supplementary” q. FA data at t+85 (82) • Publication of national data => second transmission of detailed (revised) q. FA at t+100 (97) • Other changes in volume and revaluations for all instruments • Whom-to-whom for securities (in addition to deposits and 12 loans)

Euro Area Accounts Overview Thank you for your attention! Any questions? 13

Annex 1: New ECB Guideline: Changes from 2014 14

Annex 2: Additional examples of uses - ESRB : Households’ debt-to-gross disposable income ratio Notes: Gross disposable income adjusted for the change in net equity of households and pension fund reserves. For Luxembourg, the first observation refers to 2008. For Bulgaria the last observation refers to 2010. For Cyprus, Estonia, Greece, Hungary, Lithuania, Luxembourg, Latvia, Romania, Slovakia and Slovenia the last observation refers to 2011. Data for Malta and Croatia are not available. 15

Net worth of households Source ECB/Eurostat 16

Households gross disposable income Source ECB/Eurostat 17

Annex 3: Where to find? ECB Website: Euro Area Accounts in Statistics : EAA Homepage SDW Tables and downloads • MOBU Tables: Integrated economic and financial accounts by institutional sector, euro area non-financial accounts, households, non-financial corporations, insurance corporations and pension funds, and all euro area accounts time series • EAA Detailed Tables: Main indicators, integrated economic accounts, institutional sectors, and who-to whom detail • Country Tables : Euro area and other EU countries Press releases : EAA – press release Articles • MOBU Article 2007 November • MOBU Article 2011 October 18