Statistical Notices to Reporting Banks 2005/01
Statistical Notices should be received by all those responsible for the completion of Bank of England returns. To add names to the circulation list please contact Irene Coleman (Tel. 020 7601 3644).
- Reporting transactions conducted through international clearing systems (effective end-March 2005 reporting)
- Bank visits (volunteers by end-March 2005)
- Form PL (effective end-June 2005 reporting)
- Form BG (effective end-2005 reporting)
- Form BT definitions (clarification)
- Review of reporting forms (information)
- Contents page for Yellow Folder (update)
1. Reporting transactions conducted through international clearing systems (effective end-March 2005 reporting)
It has become clear that some clarification is required on balance sheet reporting transactions conducted through international clearing systems, eg Euroclear and Clearstream. Business which is transacted through these institutions should be reported as being with the counterparty rather than the clearing system. If the business is actually with the clearing institution, for instance cash or other assets may be held in the system, these should be reported as lending to the system. Banks are reminded that transactions in these systems should only be reported net if all the requirements detailed in Section 7 of the General Notes and Definitions for reporting are met. This clarification does not affect previous guidance provided in previous Statistical Notices and Definitions on the London Clearing House.
If this clarification results in a significant amendment (over
£10mn) to your reporting, or if you have any questions
regarding the reporting of international clearing systems, please
contact either Alison
Franklin
(Tel.0207 601 5356), or Kerry
Baker (Tel. 0207 601 3754).
2.Bank visits (volunteers by end-March 2005)
Following on from discussions with reporting banks concerning the Cost Benefit Analysis project, our analysts would like to get to know the reporting banks' internal businesses better. As a result we are seeking volunteers who would be willing to invite one or two of our analysts for a 3 or 4 day "secondment" to their offices.
If you would like to be involved in these visits, please contact Anne Smith (Tel. 020 7601 4216).
3. Form PL (effective end-June 2005 reporting)
We have now had three calendar quarters of data on Form PL and it is clear that reporting is of high quality and generally consistent across the banks. However there are a couple of areas that have led to common questions that we would like to clarify.
Sector breakdown of non-residents
As mentioned in Statistical
Notice 2002/09 when the final Form PL was issued, the breakdown
of non-residents into Banks and Other Financial Intermediaries
is not currently required, and we have not yet been able to
define the Other Financial Intermediaries category for non-residents
as this is still the subject of international discussion. As
a result, this breakdown will definitely not be required before
2006.
Profits for subsidiaries abroad and non-resident
owned banks in the UK
Before the introduction of the Form PL, the profits data for
subsidiaries abroad and for non-resident owned banks were requested
on the basis of post-tax profit before dividend payments. With
the introduction of the Form PL our main data user, the Office
for National Statistics (ONS), requested that these data be
brought into line with international Balance of Payments standards
and therefore exclude holding gains and losses. The resultant
change in definition to a basis that is not used for the banks'
own purposes has led to questions about how data on this basis
can be meaningful as the higher banks' dealing profits are,
the lower the reported figure becomes, and a considerable proportion
of the reporting banks have continued to report on the previous
basis. A number of banks have suggested that it would be preferable
to report on the previous basis and given that we are able to
derive the new basis from the old basis using other items on
the form it has been decided to revert the definitions for items
PL31 and PL32 to post-tax profits before dividends payments.
For Q4 2004 and Q1 2005 it will be acceptable for banks to
report items 31A, 31B, 32A and 32B on either basis. From Q2
2005 all banks should report on the basis of post-tax profit
before dividends. Amended pages of the definitions for Form
PL are attached 
(737k) for insertion in the Yellow Folder.
If you have any queries relating to these changes please email us or contact Richard Button (Tel. 020 7601 4174), or Martin Udy (Tel. 020 7601 4731).
4. Form BG (effective end-2005 reporting)
Given the flexibility with the reporting of items 31 and 32 on Form PL for Q4 2004 and Q1 2005, as detailed in item 3 above, the reporting of annual totals of these on form BG (items 3,4,7 and 8) will be treated the same way, i.e. they should reflect whichever reporting basis has been used on Form PL.
If you have any queries relating to these changes please contact us as in item 3 above.
5. Form BT definitions (clarification)
Item 35B on the Form BT (fixed assets, commodities owned etc) should also record banks' holdings of intangible assets. The following clarification has been made to the definitions:
'These consist of land, premises, equipment, vehicles, commodities (including silver), intangible assets and other assets owned or recorded as such by the reporting institution'.
Amended pages of the Form
BT definitions are attached
(854k) for insertion in the Yellow Folder. If this clarification
results in a significant amendment (over £50mn) to your
reporting, or if you have any queries relating to these changes
please contact Alison Franklin as in item 1 above.
6. Review of reporting forms (information)
In April 2004 the Bank issued a new statistical code of practice outlining its approach to collecting, compiling and publishing statistical data. Amongst other things, the code announced that the existing forms used to collect statistical data would be reviewed every five years. To spread the workload involved in these reviews, a five year programme of reviews is now underway. The schedule below shows the year in which each review will be started:
2004 - Forms A2, CH, QX, DQ and BG
2005 - Forms BT, BE, AD, AL, HI, HO and P1
2006 - Forms CA, CC, CL, Q1D, and, reported by non-bank mortgage
lenders only, Forms MM and MQ
2007 - Forms PL and ER
2008 - Forms B1, C1, CE and, reported by members of the London
Bullion Market Association, Form G and, reported by issuing
and paying agents only, Form IPA
Some of the reviews started in 2004 are nearing completion notably the A2 and CH and the recommendations will be discussed with the British Bankers' Association. The reviews cover not only content but also the reporting population required to complete the form and the frequency of collection.
As announced in Statistical Notice 2004/07, we are also currently developing a formal cost benefit analysis framework to help guide our work in this area. So, for example, small, but costly, changes to forms or changes resulting in only modest benefits to reporters/data users will be avoided. Moreover, we will endeavour to minimise the overall impact on banks' costs resulting from changes to our reporting forms. For example, if there are interdependencies between forms, we may decide to hold back the proposals for change until all related forms have been reviewed. We will be consulting with the British Bankers' Association throughout.
Our aim in undertaking the reviews is to ensure that the statistics we collect are fit for purpose without placing an unnecessary burden on reporting institutions. It is hoped that across the suite of returns we will be able to achieve a reduction in the level of reporting for the banking sector as a whole.
If you would like more information about the reviews please contact Gordon Cherry (Tel. 020 7601 4217.
7. Contents page for Yellow Folder (update)
Attached
(217k).
Bank of England
Monetary & Financial Statistics Division
4 February 2005
