Considerations on COM(1999)749 - Amendment of Council Regulation (EC) No 2223/96 on the reclassification of settlements under swaps arrangements and under forward rate agreements

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dossier COM(1999)749 - Amendment of Council Regulation (EC) No 2223/96 on the reclassification of settlements under swaps arrangements and under ...
document COM(1999)749 EN
date December  3, 2001
 
(1) Council Regulation (EC) No 2223/96 of 25 June 1996 on the European System of national and regional accounts in the Community(4) contains the reference framework of common standards, definitions, classifications and accounting rules for drawing up the accounts of the Member States for the statistical requirements of the European Community, in order to obtain comparable results between Member States.

(2) In ESA 95, as in SNA 93, swaps are defined (5.67) as 'contractual arrangements between two parties who agree to exchange, over time and according to predetermined rules, streams of payments on the same amounts of indebtedness' and it is specified that 'the two most prevalent varieties are interest rate swaps and currency swaps'.

(3) In original versions of ESA 95 and SNA 93, interest flows exchanged between two counterparts under any kinds of swaps and under forward rate agreements have been considered as non-financial transactions, recorded in property income, under the item interest.

(4) Problems have been raised by this statement and the Commission thus considers that it is necessary to exclude these interest flows from property income, in a manner similar to revised SNA 93.

(5) It is therefore appropriate to record these flows in financial transactions under the item financial derivatives, included in ESA 95 in F3 entitled 'Securities other than shares'.

(6) A specific treatment of these flows should be defined for the data transmitted under the excessive deficit procedure.

(7) The Committee on the statistical programmes of the European Communities, established by Decision 89/382/EEC, Euratom(5), and the Committee on Monetary, Financial and Balance of Payments Statistics, established by Decision 91/115/EEC(6), have each been consulted in accordance with Article 3 of the said Decisions.