Methodological Notes

Notes

Symbols and Conventions

– Category not applicable

0,0 Magnitude less than indicated measurement units

... Data not available, although the phenomenon existed

x Indicator is not calculated in such expression

Abbreviations

ECB European Central Bank

EU European Union

ESA95 The European System of National and Regional Accounts 1995

LB The Bank of Lithuania

MFI Monetary financial institutions

MMF Money market funds

SDR Special Drawing Rights

IMF International Monetary Fund

2. Monetary Financial Institutions Balance Sheet and Monetary Statistics

The chapter provides data on the MFI of Lithuania. The data on the balance sheet of MFI of Lithuania is collected from commercial banks of Lithuania and foreign banks branches in accordance with the Bank of Lithuania Resolution No. 46 of 8 May 2003 on the Balance Sheet Statistical Reporting of the Monetary Financial Institutions and the data of the Bank of Lithuania accounting documents. This data is grossed up to cover 100 per cent of the total balance of all the credit institutions including Central credit union of Lithuania and other credit unions. Currently, the grossing up procedure to cover also MMF is not performed.

The data complies with the ECB requirements laid out in the Regulation (EC) No 2423/2001 concerning the consolidated balance sheet of the monetary financial institutions sector (ECB/2001/13), as corrected and amended.

The data is classified into categories on the basis of the requirements of this Regulation that are consistent with the classification principles laid down in ESA95.

Main categories of the assets and liabilities in the balance sheet are the following:

- cash – domestic and foreign banknotes and coins in circulation, that are commonly used to make payments held by MFI;

- loans – funds lent to borrowers – not evidenced by negotiable documents or are represented by a single document in case it has become as such – and amounts of financial leases, etc. This category also includes assets of MFI in the form of deposits;

- securities other than shares – bonds, notes, certificates and similar negotiable documents that are usually traded on secondary markets; they do not grant to the holder any ownership rights over the institution issuing them. The category also includes subordinated debt in the form of securities;

- MMF shares (units) – close substitute for deposits in terms of liquidity. These are shares (units) of such collective investment undertakings which (1) invest primarily into money market instruments and/or in MMF shares (units), and/or in other transferable debt instruments with a residual maturity of up to and including one year, and/or in bank deposits, and/or (2) rate of return on their shares (units) is similar to interest rate on money market instruments;

- shares and other equity – holdings of securities which represent property rights on a stake in a corporation, i.e., shares traded on stock exchanges (quoted shares), unquoted shares and other forms of equity; they usually generate income for the holders in the form of dividends;

- currency in circulation – banknotes and coins in circulation issued by the Bank of Lithuania, that are commonly used to make payments. This category does not comprise collectors coins issued at a price above their face value;

- deposits – amounts owed to creditors without issuing negotiable securities. This category also includes MFI liabilities in the form of loans;

- overnight deposits – deposits in both national and foreign currencies, which are convertible into currency or may be transferred against a cheque, banker’s order, etc. on demand, without any delay, restriction or fine. This subcategory also includes non-transferable deposits that are convertible on demand or by close of business the following working day without any significant penalty or restriction;

- deposits with agreed maturity – non-transferable deposits which may not be converted into currency prior to the agreed fixed term or which may be converted into currency prior to that agreed term, although in that case a fine of a particular type shall be levied on the depositor;

- deposits redeemable at notice – non-transferable deposits without agreed maturity that may not be converted into currency without a period of prior notice, until the expiration of which these deposits may not be converted into currency, or may be converted upon payment of a fine;

- repurchase agreement – an arrangement to sell an asset and to repurchase it at a specified price on a predetermined future date or on demand. Such agreements are similar to collateralised loans secured by a pledge of securities, although it differs in that the seller does not retain legal ownership of the assets. These three-type repurchase operations (repurchase agreements, bond lending against cash collateral and sale/buy-back agreement) are structured so that the necessary conditions are fulfilled and that these operations may be treated as collateralised loans, and classified under this sub-category.

- debt securities issued – bonds, notes, certificates and similar negotiable securities that are usually traded on the secondary markets; they do not grant the holder any ownership rights over the issuer. This category also comprises the issued subordinated debt in the form of securities.

- capital and reserves – financial assets as defined in category “shares and other equity” and the funds whose resource are undistributed profit or funds set aside by MFIs in anticipation of likely future payments or obligations: owners’ contributions, including share premium, profit/loss of current year, reserves and revaluation accounts, profit/loss of the previous year, provisions for loans, securities and other assets. This definition is used only for statistical purposes.

Sectoral classification is based on principles of the ESA95 classification of institutional units by institutional sectors and subsectors. Their detailed description is provided in the ECB publication „Monetary financial institutions and markets statistics sector manual – Guidance for the statistical classification of customers”. The concept “residents” in this chapter means residents of Lithuania.

The table shows sectors or groups thereof, as well as their compliance with the ESA95 institutional sectors and sub-sectors.

  ESA95 sectors
Resident sector The money-issuing
sector
MFIs Bank of Lithuania S.121
Other MFIs S.122
  O/w: MMFs
The money-neutral sector Non-MFIs Central government S.1311
The money-holding sector Other government Local government S.1313
Social security funds S.1314
Other resident sectors Financial intermediaries Other financial intermediaries and financial auxiliaries S.123+S.124
Insurance corporations and pension funds S.125
Non-financial corporations and households including non-profit institutions serving households Non-financial
corporations
S.11
Households including non-profit institutions serving households S.14 + S.15
Non-resident
sector
MFIs (banks) S.2
Non-MFIs
(non- banks)
Government
Other sectors

Resident sector:

- MFIs – financial institutions which together form the money-issuing sector of Lithuania. In Lithuania apart from the Bank of Lithuania these include commercial banks, foreign bank branches (which fulfil the MFI definition themselves), Central credit union of Lithuania, other credit unions and money market funds (collective investment undertakings, i.e. investment funds or investment variable capital companies in case they invest exclusively or most often into such short-term money market instruments as certificates of deposit, commercial papers and bank acceptances, and treasury or local authority bills). List of Lithuanian MFIs for statistical purposes is updated every month and published on the website of the Bank of Lithuania. MFIs of Lithuania are also included in the list of MFIs of the EU countries which has been compiled for the statistical purposes and updated every month by the ECB. This list is published on the ECB website;

- central government – is the government, as defined by ESA95, other than local government and social security funds. It includes all the administrative departments of the State and other central agencies whose competence extends normally over the whole economic territory, except for the administration of social security funds. Administration of counties is an area of activity of the central government;

- local government, as defined in ESA95, includes those types of public administration whose competence extends to only a local part of the economic territory, apart from local agencies of social security funds;

- social security funds – are all central and local institutional units whose principal activity is to provide social benefits and which fulfil each of the following two criteria: a) by law or by regulation certain groups of the population are obliged to participate in the scheme or to pay contributions; b) general government is responsible for the management of the institution in respect of the settlement or approval of the contributions and benefits independently from its role as supervisory body or employer. In Lithuania these are State Social Insurance Fund Board under the Ministry of Social Security and Labour and branches thereof, State Patient Fund under the Ministry of Health and territorial patient funds;

- other financial intermediaries and financial auxiliaries – are private and public entities which are principally engaged in financial intermediation (except for MFIs, insurance corporations and pension funds), i.e., engaged in borrowing, transforming and onlending funds on their own account. Entities which are principally engaged in facilitating financial intermediation but which are not financial intermediaries themselves in the MFIs balance sheet and monetary statistics, are also included under this subcategory;

- insurance corporations and pension funds – are financial corporations and quasi-corporations which are principally engaged in financial intermediation as the consequence of the pooling of risk. This category comprises both life and non-life insurance activities. It does not include pension schemes which are not autonomous pension funds (have no autonomy of decision and do not keep a complete set of accounts) and are classified as social security funds;

- non-financial corporations – are private and public entities whose principal activity is not financial intermediation activities, but the production of goods and provision of non-financial services with the objective to generate profit;

- households and non-profit institutions serving households – covers individuals or groups of individuals belonging to the household sector of Lithuania acting as: (1) consumers, (2) producers of goods and non-financial services exclusively for their own final consumption and 3) small market producers (such as sole proprietorships, farmers, businessmen working with business certificate, etc. that usually use own labour and financial resources). The sector of non-profit institutions serving households consists of separate legal institutional units, which serve particular groups of households, whose principal resources are derived, for instance, from occasional sales, voluntary contributions, from occasional payments made by general government and from property income (trade unions, political parties, churches and religious societies, charities, etc.).

Non-resident sector:

- MFIs (banks) – MFIs residing in the EU, including ECB, and institutions residing outside the EU, similar to MFIs. EU MFIs group consists of ECB, national central banks and credit institutions as defined in Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (and subsequent amendments thereto) and all the other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from institutional units other than MFIs, and, for their own account (at least in economic terms), to grant loans and/or to make investment in securities. The latter mostly made up of money market funds. Definition of a group Banks basically corresponds to that of a group MFIs, which comprise the subsector the central bank and the subsector other MFI as defined by ESA95. Group of banks as of April 2007 includes also international organisations that undertake banking activities as central monetary authorities excluding the ECB;

- general government – means central and local government and social security funds as defined in the resident sector and state government as defined in ESA95. This category also includes most (even those located in Lithuania) international and supranational organisations excluding the ECB and international organisations attributed to groups of banks and other financial intermediaries and financial auxiliaries;

- other sectors – other financial intermediaries and financial auxiliaries, insurance corporations and pension funds, non-financial corporations, households and non-profit institutions serving households, as defined in resident sector. Non-resident other financial intermediaries as from April 2007 includes international financial organisations if their activities have features of a development bank.

Euro area encompasses those Member States in which the euro has been adopted as the single currency. The euro area currently comprises Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain (as from 1 January 1999), Greece (as from 1 January 2001), Slovenia (as from 1 January 2007), Cyprus and Malta (as from 1 January 2008), Slovakia (as from 1 January 2009), Estonia (as from 1 January 2011), Latvia (as from 1 January 2014). For purposes of monetary statistics the euro area also includes the ECB.

Without prejudice to prevailing accounting and netting practices, for monetary statistics purposes all financial assets and all financial liabilities reported on a gross basis. Reported nominal value of loans and deposits excludes accrued interest. Accrued interest on securities held or issued is not included into the value of related securities.

Asset and liability items denominated in foreign currencies are converted into litas on the basis of official currency exchange rates announced by the Bank of Lithuania at the end of the reporting period.

Seasonal adjustments are not used.

There are provided three kinds of information: outstanding amounts at the end of period, transactions during period and annual growth rates. Transactions during period are calculated indirectly, i.e. by subtracting other changes (not arising from transactions) from differences in outstanding amounts. Annual growth rates are calculated from the index of adjusted outstanding amounts.

The transactions Ft in month t are calculated from differences in outstanding amounts adjusted for reclassifications, other revaluations, exchange rate variations, write-offs/write-downs of loans, and securities revaluation due to price fluctuations:

n14508/ft.gif

where: 

Lt – the outstanding amount at the end of month t;

Ct – change arising from reclassification and other adjustment;

Et – change arising from exchange rate movements;

Vt – change arising from write-offs/write-downs of loans, and securities revaluation due to price fluctuations.

Data about reclassification and other adjustment (Ct ) and revaluation adjustments (Vt ) are collected from reporting agents, while changes arising from exchange rate variations (Et ) are estimated by the Bank of Lithuania.

The annual growth rate at for month t is calculated in the following way:

 

n14508/at.gif

Where the index of adjusted outstanding amounts Itat the end of month t is defined in the following way:

n14508/lt.gif

and where: 

Ft – transactions during month t;

Lt–1 – outstanding amount at the end of the month t–1.

The base of the index is currently set as March 2004 = 100.

Data published for the first time are preliminary and are usually revised during a month. Data can also be revised as from March 2004.

Subsection 2.2

The data on aggregated balance sheet of resident other MFIs, i.e., institutions attributed to MFIs sector (excluding the Bank of Lithuania), that also include inter-MFI asset and liability positions are presented in this subsection.

Tables 2.1.1–2.2.1

Loans to residents also comprise deposits in other MFIs or financial institutions.

Subsection 2.3

Consolidated balance sheet of all resident MFIs data in which inter-MFI asset and liability positions are eliminated – amounts of the corresponding MFIs balance sheet items in the asset side have been subtracted from the MFIs balance sheet liabilities – are presented in this subsection. The sum of the inter-MFI positions is not necessarily zero, therefore the difference is given in column 11 of Table 2.3.2.

Subsection 2.4

Monetary aggregates and counterparts of Lithuania according to the ECB definition are calculated from the consolidated MFIs balance sheet. They also include some of monetary liabilities of the central government, although debt securities of the maturity of up to 2 years held by the MFIs of Lithuania shall be excluded.

Tables 2.1.3–2.9.1

Loans to non-residents also include deposits in other MFIs (banks) or financial institutions.

Subsection 2.9

The EU non-euro area means the economic territory of the EU, excluding the euro area and Lithuania. As of 1 May 2004 it also encompasses Cyprus (until 1 January 2008), Czech Republic, Estonia (until 1 January 2011), Hungary, Latvia (until 1 January 2014), Malta (until 1 January 2008), Poland, Slovakia (until 1 January 2009), Slovenia (until 1 January 2007), as of 1 January 2007 — Bulgaria and Romania, as of 1 July 2013 — Croatia.

Updated 27/02/2014