This section sets out the euro area monetary aggregates and counterparts. These are derived from the consolidated monetary financial institution (MFI) balance sheet and take account of some central government monetary assets/liabilities. This section also includes information on additional elements of relevance when using the monetary statistics published by the ECB; these include the derivation of flows, the index of notional stocks and the contributions to the annual growth rate of M3.
For data and information on MFI balance sheet statistics, see MFI balance sheets
Monetary aggregates comprise monetary liabilities of MFIs and central government (post office, treasury, etc.) vis-à-vis non-MFI euro area residents excluding central government.
M1 is the sum of currency in circulation and overnight deposits; M2 is the sum of M1, deposits with an agreed maturity of up to two years and deposits redeemable at notice of up to three months; and M3 is the sum of M2, repurchase agreements, money market fund shares/units and debt securities with a maturity of up to two years.
The ECB calculates the growth rates of monetary aggregates and of the components and the counterparts to monetary aggregates on the basis of adjusted flows rather than the simple comparison of end-of-period levels.
Stock data refer to the last day of the period (month or quarter), which can either be the last working day or the last calendar day, depending on national practice.
The flows for the current period are calculated by adjusting the difference between the stock at the end of the period and the stock at the end of the previous period for effects that do not arise from transactions such as reclassifications, foreign exchange revaluations and other revaluations.
The index of notional stocks (derived from the flows and the non-seasonally adjusted series) is currently set as December 2010 = 100.
The growth rate over the n months ending in month t is calculated by dividing the index for month t by the index for month t-n. For example, the annual growth rate for month t is obtained by calculating the ratio of the indices of months t and t-12.
Unless otherwise stated, the reference area for euro area monetary statistics covers all of the euro area countries at the time to which the statistics relate.
In line with international statistical standards, flow data are calculated by adjusting the difference between end-of-period levels for the effect of non-transaction-related factors with a view to obtaining a representation of the difference in levels brought about by financial asset acquisitions or financial liabilities incurrence by the money holding sector. These factors may be summarised under the following three headings:
Foreign exchange revaluations, which comprises any change in the value of balance sheet items originally denominated in foreign currency, which have been converted into euro, that arise owing to changes in the exchange rate of the euro. A change in the exchange rate of the euro affects the euro value of these items, in addition to actual transactions.
Other revaluations, which comprise any change in the balance sheet of the MFI sector that arises owing to changes in the market price of held, sold or issued marketable securities and the (partial) removal of loans that are subject to write-offs or write-downs from the balance sheet. A change in the market value of securities held, sold or issued by MFIs affects the outstanding stock of securities, in addition to actual transactions in these securities. A write-off or write-down of loans has an impact on the reported value of the outstanding amount of loans, but is not associated with a change in the amount of MFI financing to the economy. The Methodological notes on compiling the revaluation adjustment describes, in detail, the methods used at the national level with respect to other revaluations and related concepts.
Seasonal adjustment is the process of estimating and removing seasonal effects from a time series. The seasonal adjustment procedures used by the ECB also cater for calendar adjustment, where relevant.
The approach used to seasonally adjust the euro area monetary aggregates and counterparts relies on a multiplicative decomposition using the X-12-ARIMA method. Outliers are taken into consideration to minimise distortions to the estimated seasonal and calendar adjustments.
To ensure that the seasonally adjusted components are additive to the seasonally adjusted aggregates, some of the seasonally adjusted series, in particular M3, are derived indirectly. The difference between direct and indirect estimates of euro area monetary aggregates is regularly monitored and, generally, has proven to be negligible.
Forecast seasonal factors are also used and revised when required, for example, in the case of large data revisions or where the models used are statistically inadequate when new data are incorporated. For this purpose, a concurrent adjustment is run on a monthly basis in order to assess the validity of the seasonal factors in use.
For the list of seasonally adjusted monetary statistics (with a start date), see List of seasonal adjusted monetary statistics .
For a detailed description of the compilation of monetary aggregates and counterparts, see the Manual on MFI balance sheet statistics .