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Monetary & Financial Statistics Brief Background to Tables

  1. This publication contains the monetary and other financial statistics compiled by the Bank of England. Many of these statistics reappear in Financial Statistics, issued by the Office for National Statistics, in the context of comprehensive coverage of the UK�s financial accounts; but the Bank�s publication contains extra detail, particularly on money and banking, government financing, the money markets (including the gilt repo market) and capital issues, and a different range of interest rates.


  2. Notes and coin (Table A1.1.1) is the UK�s narrow monetary aggregate, intended to capture money held for transactions rather than as wealth. The level of notes and coin in circulation is likely to be related to economic transactions such as retail sales.


  3. M4 (Tables A2 to A4) is the UK's main broad monetary aggregate; M4 is held not only for transactions purposes but also as a form of wealth.
    Measures of M4 and M4 lending excluding intermediate other financial corporations are published in Table A2.2.3.  These provide economically more relevant estimates of broad money and credit than M4 and M4 lending based on their traditional definitions.  An article in this publication (http://www.bankofengland.co.uk/statistics/ms/articles/art1may09.pdf) sets out the background.
    'Divisia money' (Table A6.1) attempts to weight the components of M4 by the likely transactions services they offer, on the assumption that components which bear lower interest rates offer more transactions services. Because M4 comprises mainly deposit liabilities of the bank and building society sectors, it can readily be shown as either rearrangement of the MFIs' consolidated balance sheet (Table A3.1) or as part of a simplified financial accounts matrix incorporating the other elements of these sectors' balance sheets (e.g. their lending) and such as the public sector net cash requirement, public sector financing and the balance of payments (Table A3.2). Since the motives of the holders of money and of borrowers are likely to differ according to their economic sector, the sectoral analysis of M4 and lending (Table A4) is likely to be particularly illuminating: for examples of this and of use of other financial and economic data see the relevant sections of the Bank's quarterly Inflation Report and research articles in the Quarterly Bulletin.


  4. Although the competitiveness of the bank and building society sectors means that they account for the bulk of the liquidity holdings and borrowing of UK residents, liquidity is held also in other forms (see Table A7.1) and there are other channels through which finance is provided (Table A5 includes individuals' borrowing from other lenders, who may in turn at least partly finance themselves from the banks and building societies, and Table E3 shows companies' finance from issuing paper and securities on the UK capital markets).


  5. Tables B1 and B2 show the balance sheets of the monetary financial institutions' (MFI), central bank, other banks' and building societies' sector. The MFI consolidated balance sheet forms the basis for the construction of the monetary statistics shown in Tables A2 to A4.


  6. Tables B3.1 and B4.1 show UK banks' and building societies' income and expenditure. The former table shows income and expenditure for UK banks and building societies as a whole, whilst the latter shows UK banks' and building societies' income and expenditure vis-�-vis non-residents. The data are calculated in accordance with international statistical standards for National Accounts and it is therefore not possible to derive a conventional profit and loss figure for the banking and building society sectors from these data.


  7. Table C1 supplements the economic sector analysis in Table A4 by showing an industrial analysis of bank and building society deposits from and lending to UK residents.; Table C3 analyses banks' & buliding societies business by country of customer and by currency. UK registered banks and building societies also report their international lending on a consolidated bank group basis, with detail such as risk transfers, sector plus classification analysis and a limited maturity split; Table C4.2 shows these data for UK-owned banks and building societies.


  8. Table C5.1 aggregates balance sheet information on all banks and building societies in Jersey, Guernsey and the Isle of Man, as reported by the islands' institutions. Tables D2 to D6 cover the public sector debt and monetary policy operations (in addition, details of Bank of England foreign currency assets and liabilities are shown in Table D5), appropriate elements of which have already been included as counterparts of M4 in Table A3, and more general data on activity in the gilt strips market and borrowing and lending secured on government stock (gilt repo). As already mentioned, Table E3 covers finance raised by UK companies - and others - from the UK capital markets. Table F1.1 shows banks positions in financial derivatives, broken down by product, risk category and counterparty. A selection of interest rates, yields, equity prices and exchange rates (ie the prices at which financial activity occurs) is shown in Table G1.

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