ECB Regulation concerning the consolidated balance sheet of the Monetary Financial Institutions sector
At its meeting last Tuesday the Governing Council of the European Central Bank (ECB) adopted Regulation ECB/1998/16 of the European Central Bank concerning the consolidated balance sheet of the Monetary Financial Institutions sector, implementing Council Regulation (EC) No. 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank. Regulation ECB/1998/16 will enter into force on 1 January 1999, be binding in its entirety and directly applicable. It will impose statistical reporting obligations directly on reporting agents in the euro area.
The purpose of Regulation ECB/1998/16 is to enable the ECB and the national central banks (NCBs) – which, in accordance with Article 5.2 of the Statute of the European System of Central Banks (ESCB), will carry out the work to the extent possible – to collect statistical information required for the fulfilment of the tasks of the European System of Central Banks (ESCB) and, in particular, its task of defining and implementing the monetary policy of the European Community. The statistical information collected in accordance with Regulation ECB/1998/16 will be used to establish the consolidated balance sheet of the monetary financial institutions (MFI) sector, the principal aim of which is to provide a comprehensive statistical picture of monetary developments covering the aggregated financial assets and liabilities of MFIs located in the participating Member States, which are viewed as one economic territory.
For these purposes, the ECB will need to receive comparable, reliable and up-to-date statistical information which is collected according to harmonised definitions and classifications throughout the euro area. Although the data will be collected in a decentralised manner by the NCBs, a sufficient degree of harmonisation and compliance with minimum reporting standards will be required in view of the need to establish a reliable statistical basis for the definition and conduct of the single monetary policy. Furthermore, with the aim of minimising the reporting burden involved, the statistical framework put into force under Regulation ECB/1998/16 will also be used to calculate the reserve basis in accordance with Regulation ECB/1998/15 on the application of minimum reserves.
It should be noted that a version that is almost identical to the present version of the Annexes of Regulation ECB/1998/16 was published for information in the General Documentation on ESCB monetary policy instruments and procedures in September 1998. The most important aspects of Regulation ECB/1998/16 are summarised below.
Actual reporting population; List of MFIs for statistical purposes
The population of MFIs resident in the euro area will constitute the actual reporting population. MFIs comprise resident credit institutions as defined in Community law and all other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities. The ECB establishes and maintains a list of institutions in accordance with this definition and following the classification principles specified in Annex 1 of Regulation ECB/1998/16. Money market funds (MMFs) fulfil the agreed conditions and are therefore included in the MFI sector. Annex 1 of Regulation ECB/1998/16 contains a legal definition for the identification of these MMFs for this purpose.
NCBs are entitled to grant derogations to small MFIs if the MFIs which contribute to the monthly consolidated balance sheet account for at least 95% of the total MFI balance sheet in each participating Member State. The consequence of a derogation being granted by an NCB is that the small MFIs concerned will be subject to reduced reporting obligations which are compulsory in the case of small credit institutions, since they are subject to the minimum reserves system. Nevertheless, MFIs which have been granted a derogation have the option of fulfilling the full reporting requirements.
Statistical reporting obligations
To establish the consolidated balance sheet, the actual resident reporting population will have to report statistical information related to their balance sheet on a monthly basis. Further information will be required on a quarterly basis. The statistical information to be reported is also specified in Annex 1 of Regulation.
The relevant statistical data will be collected by the NCBs, which define the reporting procedures to be followed. Regulation ECB/1998/16 does not prevent the NCBs from collecting, from the actual reporting population, the statistical information necessary to fulfil the statistical requirements of the ECB as part of a broader statistical reporting framework which the NCBs establish under their own responsibility in accordance with Community or national law or established practice and which serves other statistical purposes. However, this is without prejudice to the fulfilment of the statistical requirements set out in Regulation ECB/1998/16. In specific cases, the ECB may rely on statistical information collected for such purposes to fulfil its requirements.
Verification and compulsory collection
The ECB itself and the NCBs will normally exercise the competence to verify and compulsorily collect statistical information whenever minimum standards for transmission, accuracy, conceptual compliance and revisions are not fulfilled. These minimum standards are set out in Annex 4 of Regulation ECB/1998/16.
Non-participating Member States
Regulation ECB/1998/16 is applicable only in the Member States of the euro area. However, Article 5 of the Statute of the ESCB concerning the competence of the ECB and the NCBs in the field of statistics and Council Regulation (EC) No. 2533/98 of 23 November 1998 concerning the collection of statistical information by the ECB are applicable in all Member States. This also implies, together with Article 5 of the Treaty establishing the European Community, an obligation for the non-participating Member States to carry out timely preparations in the field of statistics in order for them to become participating Member States. For reasons of transparency this obligation is recalled in the recitals of Regulation ECB/1998/16.
This Regulation will be available in all community languages from the national central banks and the ECB in the coming days and will shortly thereafter be published in the Official Journal of the European Communities.