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Home > Statistics > Explanatory Notes - M4 excluding intermediate other financial corporations (OFCs)

Explanatory Notes - M4 excluding intermediate other financial corporations (OFCs)


M4 excluding intermediate OFCs (M4ex) is a more economically relevant measure of broad money than the headline measure of M4.


Data are available quarterly, from 1997 Q4 onwards for amounts outstanding and from 1998 Q1 onwards for flows.  Data are seasonally adjusted (see Definitions for more detail).
A monthly version is available from July 2009 data onwards.


UK-resident banks and building societies report data directly to the Bank of England on Form AD.  Approximately 100 banks and building societies with eligible liabilities over £400mn or private sector deposits or loans over £1,000mn report the data on a monthly basis.


In the 2007 Q3 Quarterly Bulletin, the Bank of England set out a proposal to modify the measurement of UK M4 by excluding the money holdings of some OFCs, in order to obtain a better measure of those money holdings that are likely to be used as a medium of exchange.  Several types of OFCs mainly provide intermediation services to banks and building societies.  The deposits of these 'intermediate OFCs' are excluded from this measure of broad money. Intermediate OFCs are defined asnon-bank credit grantors; mortgage and housing credit corporations; bank holding companies; securitisation special purpose vehicles; other activities auxiliary to financial intermediation and 'other financial intermediaries' belonging to the same financial group. Until December 2010, estimates of these intra-group deposits were based on anecdotal information provided by a sample of banks. From January 2011 onwards, these intra-group deposits are collected as part of the reporting on form AD.

The data are constructed as follows:
Quarterly M4ex is calculated as households' M4 (seasonally adjusted) plus PNFCs' M4 (seasonally adjusted) plus NIOFCs M4 (seasonally adjusted). More details are available in the article published in the September 2010 Seasonal adjustment of quarterly M4 excluding intermediate OFCs (M4ex).

Following a review of the seasonal adjustment method for non-intermediate OFCs once a sufficient run of monthly data were available, changes were made to the seasonally adjusted measures of M4 and M4 lending to bring them into line with the usual approach.  The changes are detailed in Bankstats, October 2013, ‘Modifications to the seasonally adjusted measures of M4 and M4 lending excluding intermediate OFCs’.

Valuation and Breaks

Gilt repo open market

From January 1996, a change in market rules was introduced allowing all market participants to borrow and lend gilts, where previously this was only available to gilt-edged market makers (GEMMs). This structural market change has resulted in breaks to repo series in January 1996.  

Changes to AD form 

Anecdotal information on banks' intra-group business is available back to 2005 Q1 only.  From January 2011, this information is collected more formally as part of Form AD.

Form AD also now includes a separate item for securitisation special purpose vehicles. Prior to January 2011, these formed part of mortgage and housing credit grantors, non-bank credit grantors and other financial intermediaries.

Building societies transition to Bank of England reporting

Building societies' statistical reporting transitioned from the Financial Services Authority to the Bank of England on 1st January 2008, and some minor changes to the calculation of M4 and M4 lending have been implemented.  The effects of these have been removed from the flows data, and are small in terms of the amounts outstanding.

Break adjusted M4ex

Break adjusted quarterly seasonally adjusted levels series for M4ex are available from the Bank's Statistical Interactive Database.


Key Resources


 'Seasonal adjustment of M4 excluding intermediate OFCs (M4ex) – an update',  Hussain, F and Gilhooly, R (2010), Bankstats (Monetary and Financial Statistics) November 2010

 Measures of M4 and M4 lending excluding intermediate other financial corporationsJanssen, N (2009) Burgess, S and Janssen, N (2007)Bankstats (Monetary and Financial Statistics) May 2009

'Proposals to modify the measurement of broad money in the United Kingdom: a user consultation' Bank of England Quarterly Bulletin, Vol. 47, No. 3, pages 402-14