FISIM Accounting

In the System of National Accounts (SNA), the output of financial intermedation services is the sum of directly and indirectly measured components. This paper considers the second, “financial intermediation services indirectly measured” (FISIM) component, analyzing FISIM in a series of rearrangements of a cash flow identity facing any enterprise with financial instruments on its balance sheet. Our framework encompasses essentially all versions of the SNA, the user cost of money approach to financial services pioneered by Diewert (1974), Barnett (1978, 1980), Donovan (1978), and Hancock (1985), and recent analyses by Basu, Inklaar, and Wang (2011) and Colangelo and Inklaar (2012). The paper argues that the SNA’s “reference rate of interest” for calculating FISIM output is the Modigliani-Miller (1958) cost of capital, that SNA FISIM then comprises three computable components—account servicing, asset management, and risk intermediation—and that allocating FISIM to institutional sectors and thus to its intermediate and final uses should follow a “funders pay the spread” principle similar in spirit to the 1953 version of the SNA. The paper characterizes the differing views on the SNA’s inclusion of maturity and risk premia in FISIM as taking different approaches to the treatment of FISIM’s risk intermediation component

Methodologies of Price Indices in Transition Countries

Since late 1991, the IMF Statistics Department has conducted a program of technical assistance on consumer and producer price measurement and index compilation for the countries that have emerged from the former Soviet Union. These are countries whose economies are in various states of transition from centrally planned to market organization, and face special difficulties in developing price indices meeting international methodological guidelines for use in setting and monitoring the progress of macroeconomic policy. This paper describes and summarizes the findings of this technical assistance work with transition economies over the past four years, and the methodology developed by Fund experts to adapt international guidelines to the prevailing economic conditions. The paper catalogs the measurement problems and issues for compiling consumer and producer price indices in the transition context, and also comments on the use of these price series in compiling constant price national accounts.