Statistical presentation

Data description

The national accounts' financial accounts are produced in a collaboration between Danmarks Nationalbank and Statistics Denmark.

The institutional division aims to shed light on the economic behavior exhibited by the actors in the Danish economy. Therefore, it is the quorum units, typically firms, that are the starting point for the placement in sectors.

The statistics for financial accounts are part of the national accounts system, and therefore consist of coherent definitions and classifications that show how the institutional sectors of the economy place / finance their net lending / borrowing as well as show how the financial net worth are placed in financial instruments.

Financial accounts consist of the financial transaction account, the revaluation account, the account for other volume changes and respectively the opening and closing balances. The first three describe the transition from the beginning of the reference period to the end of it. Each account is calculated for the individual financial instruments:

F.1 Monetary gold and Special Drawing Rights (SDR). This instrument is partitioned into: · F.11 the gold stock held by the Danish Central Bank · F.12 SDRs allocated to the members of The International Monetary Fund

F.2 Currency and deposits. This instrument is partitioned into: · F.21 notes and coins in circulation issued by the resident monetary authorities · F.22 transferable deposits which are fully convertible into currency on demand and which are directly usable for making payments by cheque, draft, bankers order or other direct payment facilities, without penalty or restriction · F.29 other deposits

F.3 Debt securities. It includes financial assets which are negotiable and bearer instruments, are usually traded on secondary markets, and do not grant the owner any ownership rights in the issuing institutional unit. Includes bills of exchange, bonds, treasury notes, certificates of deposit, commercial papers or the like, which are traded at the financial markets. The instrument is partitioned into: · F.31 short-term debt securities · F.32 long-term debt securities

F.4 Loans. It consists of financial assets created when creditors lend funds to debtors, either directly or through a intermediary, evidenced by non-negotiable documents or not evidenced by documents. The instrument is divided into: · F.41 short-term loans · F.42 long-term loans

F.5 Equity and investment fund shares or units. The instrument consists of financial assets by which the exchange has a transfer of ownership rights on corporations or quasi-corporations. These financial assets usually entitle the holders to a share in the profits of the corporations or quasi-corporations and to a share in their net assets in the event of liquidation. The instrument is further divided into: · F.51 equity. The instrument is further divided into: · F.511 listed shares · F.512 unlisted shares · F.519 other equity · F.52 Investment fund shares or units. The instrument is further divided into: · F.521 money market fund (MMF) shares or units · F.522 non-MMF investment fund shares or units

F.6 Insurance, pension and standardised guarantee schemes. It consists of households' pension entitlements in life insurance which includes technical provisions of insurance corporations and pension funds against policy holders or beneficiaries. In addition the instrument includes prepayments of insurance premiums and reserves for outstanding claims. Prepayments of insurance premiums consist of the amount representing that part of gross premiums written which is to be allocated to the following account period. Reserves for outstanding claims consist of the total estimated cost of settling all claims arising from the events which have occurred up to the end of the accounting period, whether reported or not, less amounts already paid in respect of such claims. The instrument also includes standardised guarantee schemes. Standardised guarantees schemes, are guarantees, which usually covers small uniform amounts issued in large quantities. The amount is the estimated loss the issuer will suffer as a result of the guarantee. The instrument is partitioned into: · F.61 non-life insurance technical reserves · F.62 life insurance and annuity entitlements · F.63 pension entitlements · F.64 claims of pension funds on pension managers · F.65 entitlements to non-pension benefits · F.66 provisions for calls under standardised guarantees

F.7 Financial derivatives and employee stock options. Consist of financial instruments linked to a specified financial instrument or indicator or commodity. The instrument is divided into · F.71 financial derivatives · F.72 employee stock options

F.8 Other accounts receivable/payable. Financial assets which are created as a counterpart of a financial or a non-financial transaction in cases where there is a timing difference between this transaction and the corresponding payment. The instrument is divided into: · F.81 trade credits and advances · F.89 other accounts receivable/payable, excluding trade credits and advances

The financial transaction account, which shows the buying and selling of financial instruments, indicates how the sectors of the economy dispose of their net financial worth. The revaluation account shows changes in value and the account for other volume changes shows e.g. losses on debtors and transfers of units between sectors. Financial accounts are calculated at current prices.

Institutional units are in principle grouped into six sectors on the basis of their economic behavior. A sector thus comprises a group of institutional units that exhibit uniform economic behavior. The national accounts operate in principle with six main sectors: non-financial corporations, financial corporations, general government, households, non-profit institutions serving households (NPISH) and rest of world.

Accounts are prepared for each sector so that it is possible to distribute opening and closing balances and transactions, revaluations and other volume changes in the individual sectors and associated counterparty sectors. Financial accounts contain a lot of valuable information about the economy that can be used for economic analysis and / or economic policy. For example, financial accounts can be used to assess financial stability and to analyze how the sectors are financially interconnected. Key figures in financial accounts include corporate debt, household debt and pension savings, as well as net financial assets.

Financial accounts are in accordance with the guidelines in the European System of National and Regional Accounts (ESA2010) and thus consistent with the other national accounts.

Classification system

In a macroeconomic analysis, each institutional unit is not considered separately - it is the aggregated activities carried out by uniform institutions that are analyzed. The units are therefore combined into groups with the term institutional sectors, some of which are again divided into sub-sectors.

Thus, a sector comprises a group of institutional entities that exhibit uniform economic behavior. The national accounts operate in principle with six institutional sectors.

The statistics cover all institutional sectors of the economy. As can be seen from the overview below, S.12 Financial corporations and S.13 General government can be subdivided into a number of sub-sectors:

· S.1 Total economy · S.11 Non-financial corporations · S.12 Financial corporations · S.121 Central Bank · S.122 Deposit-taking corporations except the central bank · S.123 Money market funds (MMF) · S.124 Non-MMF investment funds · S.125 Other financial intermediaries, except insurance corporations and pension funds · S.126 Financial auxiliaries · S.127 Captive financial institutions and money lenders · S.128 Insurance corporations · S.129 Pension funds · S.13 General government · S.1311 Central government · S.1313 Local government · S.1314 Social security funds · S.14 Households · S.15 Non-profit institutions serving households (NPISH) · S.2 Rest of the world

For more information on the sectors, see Sector classification in the European system of accounts (ESA2010).

Classification of transactions Financial accounts are part of the national accounts and consist of a logical and coherent classification system, without which it would not be possible to obtain an overview of the immense number of economic transactions that take place in the national economy over a period of time.

Financial accounts only classify four items: three transaction items and a balance sheet item.

Classification of accounts For each of the six main sectors, a sector account is prepared showing all relevant transactions and balance sheet items. The following four accounts are relevant to the institutional sectors: 1. Financial transaction account: shows the purchase and sale of financial instruments 2. Revaluation account: covers changes in the value of the financial instruments that are due to market changes in the value of the instrument, e.g price changes in shares 3. Account for other volume changes: describes changes in the value of an asset or liability that cannot be explained through financial transactions or revaluations. It can e.g. be losses on the debtor and transfers of units between sectors 4. Current accounts: Describes the size of financial assets and liabilities calculated at the end of the period.

Sector coverage

All six institutional sectors are covered. In principle, the six sectors can be subdivided into sub-sectors. In the annual tables alone, General Government is subdivided into sub-sectors.

Statistical concepts and definitions

Financial assets: A financial asset means one of the following assets: - Cash - A contractual right to receive cash or another financial asset from another party - A contractual right to exchange financial instruments with another party on potentially favourable terms; or - An ownership instrument of another party.

Financial liabilities: Is a contractual obligation to - provide cash or another financial asset to another party, or - exchange financial instruments with another party on potentially unfavourable terms

Institutional unit: An economic unit which, at its own discretion and under its own legal responsibility is able to: - Own assets, and exercise the rights that follow - Take on debt - Perform economic activities, such as production, consumption, investment and savings - Enter into financial transactions with other entities - Meaningfully prepare full accounts including both an operating account and a balance sheet.

An account does not necessarily have to be available for an entity to meet the definition. It is sufficient that the entity, if it so desires or is required by it, will be able to keep meaningful accounts.

Resident company (Danish): A company that has a financial center of interest (pursuing economic activities) in Denmark for a longer period (more than one year). This means that branches or subsidiaries of foreign companies are considered resident companies.

Net worth: Is for each sector calculated as assets minus liabilities.

Statistical unit

The units in the national financial accounts are all the financial transactions that are made or the financial claims that exist between two Danish residents or between a Danish and a foreign resident.

Statistical population

All financial transactions where at least one party is resident for a given period.

Reference area

Geographically, the national accounts cover Denmark, whereas the Faroe Islands and Greenland are treated as the rest of the world.

Time coverage

Annual tables cover the time period from 1995 onwards, while quarterly tables cover from the 1st quarter 1999 onwards. The periods stated here relate to the result of the use of the common IT system for financial accounts, which has been developed in collaboration between Danmarks Nationalbank and Statistics Denmark.

Annual data, based on other sources and methods, are available in Statistics Denmark back to 1995.

Quarterly data, based on other sources and methods, are available at Danmarks Nationalbank back to the first quarter of 2005.

It is the ambition that Statistics Denmark and Danmarks Nationalbank will work together to establish back data.

Base period

Not relevant for these statistics.

Unit of measure

DKK million.

Reference period

Calendar year and quarter.

Frequency of dissemination

The quarterly financial accounts are published four times a year - March, June, September and December.

The annual financial accounts are published three times a year - March, June and September.

Legal acts and other agreements

Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European System of national and regional accounts in the European Union (ESA2010) (EUT L 174 26.06.2013, s. 1).

Commission Decision of 17 December 2002 further clarifying Annex A to Council Regulation (EC) No 2223/96 as concerns the principles for measuring prices and volumes in the national accounts.

Guideline of the European Central Bank: Guideline (ECB/2013/24) of 25. Juliy2013.

Cost and burden

The statistics are based on information collected by Statistics Denmark and Danmarks Nationalbank to compile other statistics. There is therefore no direct response burden in connection with the calculation of the national accounts' financial accounts.

Comment

The financial accounts statistics have undergone a benchmark revision since the last publication. In this benchmark revision, the statistics have been revised back to 1995. The benchmark revision is a pan-European project that is carried out every 5 years. The purpose of the revision is to incorporate new knowledge and new methods and to ensure uniform calculation methods for all countries.

For further information, contact Statistics Denmark or Danmarks Nationalbank directly.

Kirstine Boye Petersen Money, Banking and National Accounts Statistics, Financial statistics department Danmarks Nationalbank Langelinje Allé 48 kbpe@nationalbanken.dk Tel. 33 63 62 75

Jesper Søgaard Dreesen Government Finance Statistics, Economic statistics department Statistics Denmark Sejrøgade 11, 2100 København Ø jsd@dst.dk Tel. 39 17 30 54