Statistical Notices to Reporting Banks 2006/03
Statistical Notices should be received by all those responsible for the completion of Bank of England returns. To amend the circulation list please contact Stuart Jordeson (Tel. 020 7601 3644).
- Discontinuation of Form P1 (effective immediately)
- Update to the Classification of Accounts Guide (effective immediately)
- Cash Ratio Deposits (effective immediately)
- Money Market Reform (effective end-May 2006 reporting)
- Reporting Schedule (effective end-July 2006 reporting)
- Provisions reporting on Form PL (effective end-September 2006 reporting)
- Stock lending/borrowing reporting on Form BT (clarification)
- Write-offs reporting on Form QX (clarification)
- Contents page for Yellow Folder (update)
1. Discontinuation of Form P1 (effective immediately)
We have now completed the review of Form P1 within our rolling review programme and concluded that the form can be discontinued. After consultation with the British Bankers’ Association, it has been agreed that Form P1 will be withdrawn with immediate effect (the end-March data being the last data required).
The review focused heavily on analysing the costs of reporting Form P1 against the benefits of using collected data. Discussions with reporting banks have indicated that the form is costly to complete as the data are not generally held in reporters’ systems and there are high volumes of relevant transactions. Given these factors it is difficult for both the Bank and reporters to check data quality rigorously. As part of the review we discussed these issues with these data’s main user, the Office for National Statistics, and they have agreed to accept data available from estimation undertaken by the Bank. All banks affected by the discontinuation of Form P1 have been notified directly.
Consequently, we are also withdrawing the monthly Form P1 (EMU version) from the suite of forms prepared in the event of the UK’s participation in the euro area (see Statistical Notice 2003/08).
If you have any queries relating to the abolition of Form P1 please contact Bonnie Howard (Tel. 020 7601 4174), or Martin Udy (Tel. 020 7601 4731).
Related resources
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Statistical Notice 2003/08 |
2. Update of Classification of Accounts Guide (effective
immediately)
In Statistical Notice 2006/02, we updated the country
list within the Classification of Accounts Guide. In line
with this we have now updated the definition of Denmark
within Section III of the guide to exclude the Faeroe Islands
and Greenland.
Related resources
 |
Classification of Accounts Guide (Sector Categories) |
|
Statistical Notice 2006/02 |
3. Cash Ratio Deposits (effective
immediately)
Cash Ratio Deposits (CRDs) are non-interest-bearing
deposits lodged with the Bank of England by eligible
institutions (ie. banks and building societies),
who have reported average eligible liabilities
(ELs) in excess of £500 million over a
six-month calculation period.
The level of each institution's CRD is calculated twice yearly (in May and November) at 0.15% of average ELs in excess of £500 million over the previous six end-calendar months. The next adjustment to CRDs is due to take place on Thursday 1 June, based on data reported on BT item 46 (Total Eligible Liabilities) for the months of November 2005 through to April 2006.
The deadline for revisions to ELs to be reflected in the 1 June adjustment is 5pm on Thursday 18 May, call notices will be issued shortly thereafter. Amendments to BT item 46 can be made via the usual contacts, but must be confirmed either in writing or by re-submitting the form.
If you have any queries relating to CRDs, please contact Sarah Waddington (020 7601 5505).
4. Money Market Reform (effective end-May 2006 reporting)
The Bank has now confirmed that intends to launch the new framework for its money market operations on Thursday 18 May.
Reporters are reminded that any banks borrowing from the Bank of England
should report the borrowing as a repo and therefore include it within
balance sheet Items 6A or 7A (depending on the collateral), and banks
placing funds with the Bank of England should report these within Item
21B along with the voluntary reserve account. If you have any queries
about this reporting please contact the Helpdesk on 020 7601 5360.
Further information about Money Market Reform can be
found on the Markets pages of our website.
Related resources
|
Money Market Reform |
5. Reporting schedule (effective end-July 2006 reporting)
A reporting schedule covering the period from July 2006 to June
2007 is now available to download.
Related resources
|
Reporting schedule (July 2006 - June 2007) |
6. Provisions reporting on Form PL (effective end-September 2006 reporting)
Provisions were added to income and expenditure reporting in 2004 with the introduction of Form PL, mainly for use in financial surveillance work within the Bank of England but also to aid reconciliation to financial accounts. During 2005, provisions data quality was checked and a number of reporting banks were contacted to discuss their figures. This investigation has highlighted a number of ways in which we can improve the provisions data and these are set out below.
Discussion with a small number of reporting banks has highlighted a type of provisions accounting that had not been specifically covered when the Form PL definitions were drafted. A number of banks do not always make provisions on their balance sheet but write off directly from the P&L account and therefore only report a figure in write-offs (PL20AE) and net provisions for bad and doubtful debts (PL20A). Going forward, we will also want to see this charge included within the specific provision charges (PL20AA) or general provision charges (PL20AD) to make data comparable whichever way the write-offs are made. Therefore we expect the net provision for bad and doubtful debts (PL20A) to be equivalent to specific and general provisions minus releases and recoveries, or in box notation:
PL20A = PL20AA + PL20AD - PL20AB - PL20AC
Write-offs directly from the P&L account will therefore be equivalent in treatment to a provision and subsequent write-off made within the same quarter. Although the above calculation does not form part of the internal validations for Form PL, it will be monitored by Bank staff as part of the plausibility process.
Statistical Notice 2004/06, covering International Accounting Standards, asked for provisions to be reported in whichever way best fits individual banks’ treatment within their financial accounts. Discussion with banks has indicated that most are reporting individually impaired provisions within specific provisions (PL 20AA) and collective provisions within general provisions (PL20AD). We would be grateful if banks not reporting within this convention, and instead including collective provisions within specific provisions, could contact us to discuss how they are deriving the sector split of collective provisions.
Further clarification on some of the definitional points for provisions reporting have been included within expanded provisions reporting definitions in the Yellow Folder. If you have any queries relating to these changes please contact Bonnie Howard (020 7601 4174) or Martin Udy (020 7601 4731).
Related resources
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Statistical Notice 2004/06 |
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Form PL definitions |
7. Stock lending/borrowing reporting on Form BT (clarification)
Reporting institutions are reminded that lending and borrowing of securities should be treated in the same manner as repo activity, provided the underlying collateral is cash and not some other security. Hence the lending of securities in exchange for cash collateral, with a commitment to repurchase, should be reported as a repo in BT Item 6 or 7, depending on the nature of the security being loaned, and the borrowing of securities in exchange for cash collateral should be reported as a reverse repo, in BT Item 30 or 31.
Lending and borrowing of securities in exchange for other securities should
not be reported on the balance sheet return.
Should you have any queries regarding stock lending reporting,
please contact Stephen
Burgess (020 7601 5356).
8. Write-offs reporting on Form QX (clarification)
As stated in the updated instructions in January, data reported in Form QX sections four and five should include write-offs of loans and marketable instruments which would appear in BT Items 23, 26 and 29. However, they should exclude all write-offs and revaluations of investment securities reported in BT Item 32: write-offs and revaluations of these items is reflected in the changes in BT levels, but should not be reported on Form QX.
It is hoped that this is in keeping with banks’ existing accounting practices. Should you have any queries regarding write-offs reporting, please contact Stephen Burgess (020 7601 5356).
9. Contents page for Yellow Folder (update)
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Updated contents page for Yellow Folder |
Bank of England
Monetary & Financial Statistics Division
8 May 2006
