Bankstats article
By Christopher Handler and Alisha Patel
These data, collected from January 2014, include further monthly sectoral detail on deposits, loans and securities transactions with non-residents. The data highlight that business with deposit taking corporations (DTCs) accounts for approximately half of the stock of MFIs’ all-currency loans to and deposits from non-residents. Within this, those DTCs that are part of the same group as the reporting institution comprise the majority of this proportion. The Bank will also publish data relating to the maturity of loans to certain non-residents.
Introduction
The Bank of England started collecting new monthly data on UK MFIs’ balance sheets, and in particular their business with non-residents, from January 2014. These data provide further sectoral detail, including information on deposits, loans and securities business with non-residents; the maturity of loans to certain non-residents; and levels of intra-group activity by UK-resident MFIs with non-resident DTCs (this category refers to non-resident banks and other non-resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than deposit taking corporations and, for their own account to grant credit and/or make investments in securities. Non-resident deposit taking corporations include central monetary institutions but exclude money market funds) and other financial corporations (OFCs). Obtaining further sectoral detail will enable better analysis of non-resident business.
These data will be made available from the next publication of Bankstats in the new Table B2.5.1 and on the Bank’s Statistical Interactive Database. The suitability of seasonal adjustment will be assessed once a sufficient back run is available for these series.
This article describes the new data, and relates them to recent quarterly data also published by the Bank on transactions with non-residents. A list of new series to be published is provided in the Annex.
Details of new data
Deposits by sector
Data on UK MFIs’ deposit liabilities to non-resident DTCs, OFCs and other non-residents will be published monthly on amounts outstanding and flows for sterling, euro and other foreign currency. The flows are typically large and volatile, with a substantial proportion relating to intra-group activity. Data are therefore included to identify positions with non-resident DTCs and OFCs that are a member of the same group as the reporting institution.
Chart A shows that most non-resident deposits with UK MFIs are from financial corporations, particularly DTCs (maroon and orange bars). Within this, non-resident DTCs that are part of the same group as the reporting institution form a substantial proportion of amounts outstanding (maroon bar), highlighting the international nature of the UK financial services industry.
Chart B provides a preview of changes in non-resident all-currency deposits and shows that monthly movements of MFIs’ business with non-residents are large and volatile and are typically driven by business with DTCs (maroon and orange bars).
Loans by sector and maturity
Similarly, UK MFIs’ loans to non-residents will also be available split by DTCs, OFCs and other non-residents, along with the intra-group proportion of DTCs and OFCs (Charts C and D).
The sectoral split of loans is broadly similar to that for deposits. Chart C shows that positions with DTCs account for approximately half of the stock of MFIs’ all-currency loans, and within this, those DTCs that are part of the same group as the reporting institution, comprise the majority of this proportion (maroon bar).
Chart D shows monthly changes in UK MFIs’ all-currency loans to non-residents, split by sector. These data highlight that movements are also large and volatile, but are spread more evenly between DTCs and OFCs.
For OFCs and other non-residents there will also be a maturity split of loans with original maturity up to and including twelve months and over twelve months.
Securities by instrument and sector
Data on UK MFIs’ holdings of securities issued by non-residents will be available (Chart E), split by DTCs, OFCs, central government and other non-residents. The intra-group proportion will be available for DTCs and OFCs. These sectors will also be split by instrument, with securities further broken down into quoted shares; bonds and other debt securities; and all other securities.
Chart E shows that MFIs’ securities business with non-residents is well spread across sectors and that the proportion of business with intra-group counterparties (maroon and dark blue bars) is smaller than for deposits and loans.
Monthly and quarterly data on non-resident loans and deposits
Additional data, also relating to transactions with non-residents, were recently made available as part of the more detailed quarterly data published by the Bank.3 These data are broadly consistent with, and complement, the new monthly data. There are some differences between the data collections, which mean that they are not directly comparable. These differences include, but are not limited to, the sample and coverage of the respective reporting populations; the granularity of currency information available to adjust for the effects of exchange rate movements in the data; and the timing of the data collection.
The monthly data will allow users to better understand the large and volatile monthly flows of MFIs’ business with non-residents. They will also inform analysis for various purposes, including the possible effects on domestic flows of money and credit data. The quarterly data collects more comprehensive information on cross-border financial linkages, which comply with the Bank for International Settlements’ international banking statistics requirements.
Next steps
The new data series will be available from the next edition of Bankstats, published on 29 September 2015.
To view all related charts and Annexes, please download the full article:
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For questions relating to this article please contact dsd_ms@bankofengland.co.uk or call +44 (0) 20 3461 5356.