Coordinated Compilation Exercise (CCE) for Financial Soundness Indicators (FSIs): Metadata

• Information by Country

• Information by Questions within Metadata Questionnaire for one or more Countries
• Information by Text Search within Metadata Questionnaire for one or more Countries
  

• Information within Metadata Template for one or more Countries

Countries participating in the Coordinated Compilation Exercise (CCE) prepared and submitted the financial soundness indicator (FSI) metadata, along with the FSI data, to the IMF for dissemination to the public through this website. The FSI metadata are presented in two metadata report forms (MRFs), namely the Metadata Questionnaire (MQ) and the Metadata Template (MT). The FSI metadata are intended to provide information about the national practices—methodological and institutional—that govern the compilation of FSIs. They explicitly focus on the degree of consistency of national practices (as of December 31, 2005) with the benchmarks and recommendations offered in the Financial Soundness Indicators: Compilation Guide (Guide). Using the Guide as a standard for the development of the FSI metadata ensures efficiency and focus in comparing the national practices of compiling and reporting FSIs, and helps avoid excessive length in countries' metadata documentation.

Content and Modalities of the Metadata Report Forms

The MQ and MT are fully complementary and mutually supportive, and have parallel structures. The parts in the one have by-and-large corresponding counterparts in the other. There are seven parts (Parts A through G) in both documents. Parts A, B, and F in the documents cover information on the institutional arrangements of FSI compilation and the aspects of data processes that provide assurances of source data accuracy and reliability. Part C in the documents covers general methodological practices for the compilation of FSIs for the sector of deposit takers, while Part D covers general methodological practices relevant to the compilation of FSIs for the other three sectors: other financial corporations (Part D-OFC), nonfinancial corporations (Part D-NFC), and households (Part D-HH). Part E in the documents deals with the compilation practices used in the compilation of the specific data (series) underlying the FSIs (core and encouraged). Part G in the MQ (Additional Information Relevant to the Compilation and Dissemination of FSIs) is where countries can post supplementary information of their own choice. Part G in the MT displays data under any of the sectoral financial statements that countries were encouraged under the CCE to provide.

It should be noted that there is also Part E Suppl. in the MT, which is meant to provide space for metadata of FSIs and their underlying series, when there is more than one version of the FSI compiled by the country. For example, if a country provides data for FSI I7 compiled on both domestically controlled cross-border consolidation basis and on domestic consolidation basis, the metadata for the one version will appear in Part E and those of the other version will appear in Part E Suppl.

The focus of the MT is on (a) providing concise indications (through coding to be explained in the notes and definitions section) as to the consistency of the national compilation practices of FSIs with the recommendations of the Guide and (b) succinctly stating the major departures from the recommendations in the Guide regarding general methodological practices relevant to sector data or specific compilation practices for data underlying the FSIs that are reported by the country in its data report forms. In view of this, the MT provides references (and links) to the relevant paragraphs in the Guide regarding specific compilation issues. Moreover, the MT provides references (and links) to the relevant questions in the MQ, which the reader can consult for more detailed descriptions of the metadata, presented in the form of questions and answers. In Part E of the MT, links are also available to the corresponding tables (with FSIs and underlying data, respectively) in the FSI data pages.

The FSI accounting framework of the Guide has several important methodological aspects that have to be taken into account in the collection and compilation of FSIs so as to ensure that FSIs effectively assess the current financial health and soundness of the financial sector as whole. This has meant that methodological aspects such as institutional coverage/consolidation basis and consolidation adjustments (both intra-group and inter-group) feature prominently in the MRFs, both in the MT and the MQ. These methodological aspects are discussed further in the notes and definitions section.

Other notable methodological aspects addressed in the MRFs are: accrual accounting, arrears, potential costs, investments in associates and unconsolidated subsidiaries, asset boundary, identification of loan loss provisions, collateral and guarantees, valuation method, tax deduction, definition of foreign-currency-denominated instruments and maturity, and recording of gains and losses on financial instruments. All these methodological aspects, along with the aspects of consolidation basis and consolidation adjustments are addressed for the sector as a whole (in Parts C and D of the MT and the MQ), if FSIs are reported by the country for that sector. The aspects of consolidation basis and of the two types of consolidation adjustments are also addressed for each individual FSI and underlying series in Part E of the MT and the MQ (as practice in these areas often tends to vary from one series to the next).

Finally, the metadata provide an assessment of the consistency of the definition of the underlying data used to compile FSIs with the definitions provided in the Guide. Short descriptions of the definitional differences of specific data series with the Guide are provided by countries in the rightmost column of Part E of the MT, while more detailed descriptions are provided in Part E of the MQ. If the Guide does not provide guidance in some cases, NA is posted in the column dealing with definitional consistency in Part E, and the national practice is indicated briefly in the rightmost column of Part E of the MT.

When a series has not been reported by a country in the CCE, the metadata entries in Part E of the MT corresponding to that series have been left blank. Moreover, the answers to the questions regarding this series in Part E of the MQ have been left blank. Therefore, blank cells in the MT and missing answers in the MQ indicate the absence of reporting of a certain series by a country. Furthermore, if a country has not reported any FSIs for one or more of the nondeposit-taking sectors (other financial corporations sector, nonfinancial corporations sector, and households sector), then the corresponding section of Part D (D-OFC, D-NFC, D-HH) in the MT has been left with no entries in the cells; the corresponding section in Part D in the MQ also shows no answers under the relevant questions.

Query and Search Facilities

This webpage provides access to the FSI metadata submitted by countries participating in the CCE in the form of the MRFs described above. In addition, information can be searched by country, by questions, and by text search within the MQ for one or more countries, and by type of information within the MT for one or more countries. Moreover, links are provided from the results of the queries of the MT to (i) the MQ (for more detailed information about national practices in compiling these data), (ii) the recommendations provided in the Guide for compiling these data, and (iii) the data themselves. These facilities are provided to assist the readers to obtain and compare information across countries effectively. They are also provided to facilitate the retrieval of more or less detailed metadata, as needed, and compare them to the recommendations of the Guide.

Institutional coverage/consolidation basis refers to what institutions are included in the coverage of FSIs. It is discussed in detail in the introduction to the FSI data pages.

Consolidation adjustments refer to the elimination of positions and flows between entities within a group or a sector. The eliminations of positions and flows arising from transactions between entities within a group (e.g., a parent, its branches, and its subsidiaries) are termed intra-group consolidation adjustments; the eliminations of positions and flows arising from transactions between unrelated entities (i.e., different groups) within a sector (e.g., deposit-taking sector or other financial corporations sector) are called inter-group (or sector level or intra-sector) consolidation adjustments. The purpose of the intra-group consolidation adjustments (where all positions and flows between the group members are eliminated) is to eliminate double-counting (gearing) of capital in the group as well as to avoid the double-counting of income and assets arising from the intra-group activities. Inter-group consolidation adjustments involve the elimination of all positions and flows between groups in the population except for debt and financial derivative positions between groups. The Guide (5.53-5.90) provides a detailed description of the seven inter-group consolidation adjustments envisaged for items in the income and expense statement and of the three adjustments called for balance sheet positions. The purpose of inter-group consolidation adjustments is similar to that of the intra-group consolidation adjustments, except that the aim now is to eliminate the double counting of capital and income within the entire reporting population and not just at the level of the group.

Assessing consistency with the recommendations in the Guide uses three categories, which are reflected in the coding used in MT. They include “Full Consistency” (coded as FC), “Less than Full Consistency” (LFC), and “Not Applicable” (NA). The category FC is used in cases where the Guide has a recommendation and the country meets fully that recommendation. For cases where the Guide provides a recommendation, but it is not fully met by the country, the category LFC is used, and the rightmost column in the MT is used to describe succinctly the deviations from the Guide.¹ For a fuller and more comprehensive discussion of all the deviations from the Guide’s recommendations, the reader will have to go to the MQ (via the available link), which provides more detailed information about national practices.

It should be made clear that the categorization of a national practice as LFC is not meant to indicate that the practice is inappropriate or suboptimal—the LFC is simply an indication of consistency of the national practice with the recommendations on the matter at hand found in the Guide. For example, it could be argued that the national practice is more appropriate than the recommendation of the Guide given the country's circumstances.

NA is used in the MT when the Guide does not offer a recommendation. In such cases, countries were asked to also provide a succinct indication of the practice on the matter at hand (e.g., on the tax deductibility of provisions, or the definition of total regulatory capital used). It should be noted that NA is not used to indicate the absence of compilation or reporting of data in the CCE of a given FSI or its underlying series.

It should be noted that for FSIs I1 and I2 and the underlying data S1, S2, S3, S4 as well as for total regulatory capital and regulatory Tier 1 capital that are used to compile FSIs other than I1 and I2, the definitional rating in column 3 in Part E of the MT is always NA. This is because the Guide relies on national practice to compile these regulatory data.

There are also three categories for assessing the completeness of consolidation adjustments in the MT. For intra-group consolidation adjustments, they are “Full Intra-group Consolidation Adjustments” (coded as FC),² “Less than Full Intra-group Consolidation Adjustments” (LFC), and “Not Applicable” (NA). For inter-group consolidation adjustments, they are “Full Inter-group Consolidation Adjustments” (FC),³ “Less than Full Inter-group Consolidation Adjustments” (LFC), and “Not Applicable” (NA).⁴ The Guide advocates full intra-group and inter-group consolidation adjustments.

A general rule used in putting together the metadata in Part E (and Part E Suppl.) is that if even one underlying series of a FSI ratio is characterized by LFC (whether it means less-than-full consistency or less-than-full consolidation adjustments) in some methodological aspect, then that aspect is characterized as LFC for the ratio as a whole. In addition, if a certain methodological aspect is not applicable for one of the two underlying series of a FSI ratio (and NA is entered for that underlying series), this means that the full FSI ratio is FC, LFC, or NA if the other underlying series is FC, LFC, or NA, respectively. There is only one exception to the latter rule: when it is recommended by the Guide that capital should be of a specific type (e.g. total capital and reserves) and the country uses instead total regulatory capital or Tier 1 capital, then under definitional consistency with the Guide in Part E (and Part E Suppl.) the underlying series will display NA (see above), but the FSI ratio as a whole will display LFC for definitional consistency. The rightmost column in Part E, in describing deviations from the Guide, should include a brief indication of this matter for the FSI ratio as a whole.