Valuation and Breaks
Details of breaks in monetary series and temporary distortions to the data up to December 1988 are described in Technical Series paper No 23 entitled 'Breaks in Monetary Series' published by the Bank in February 1989. This paper was updated in Part 2 of the 'Bank of England Statistical Abstract 1993', and in section B of subsequent Statistical Abstracts.
Banking Statistics Review
New banking statistics returns were introduced at end-September 1997 to bring the UK into line with European System of Accounts 1995 (ESA 95) standards. Flows were adjusted to remove the effects of any changes resulting from the new forms. Levels were, however, on the new basis from end-September.
Specific changes affecting the monetary aggregates were the removal of any Channel Islands and Isle of Man (CI/IoM) 'opted in' banks from the monetary sector and the re-classification of any business with the CI/IoM as non-resident.
For further details of the changes, see articles in the September 1997 Statistics article 'Outcome of the review of banking statistics, including effects on monetary and other banking statistics' and February 1998 'Impact of the review of banking statistics: changes and additions to published data'.
Building Societies Statistical Review
In October 1998 a revised new monthly building society form was introduced bringing the building societies into line with ESA 95 standards, and breaks in series occurred as definitions changed.
Prior to October 2007, all non interest-bearing deposits were included in banks' retail deposits. From October 2007 data onwards, non-interest-bearing deposits are only included in Retail M4 when reporters identify them explicitly as being taken from retail sources. Consequently there was a small fall in the amount outstanding of Retail M4 in October 2007.
Building societies' 'retail' deposits are now compiled on the same basis as banks. Prior to January 2008, these included all shares held by individuals and deposits from individuals. From the time of the introduction of revised building society forms in September 1992, net transit items (i.e. assets less liability transit items) were subtracted from these deposits to offset any over/under-statement in the flow of the UK private sector's holdings of M4, i.e. sterling deposits at MFIs combined. Prior to October 1998 'Retail' was as defined in section 7 of the 1986 Building Societies Act.
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.
From January 2010 data onwards, all loans that have been securitised by MFIs are included on these institutions' balance sheet for statistical reporting purposes. Some institutions already reported securitisations on balance sheet prior to 2010, so their reporting did not change. However, other institutions brought back on to their balance sheets loans that had been securitised in the past. When these loans came back on balance sheet, an additional liability to the SPV was also created, to balance out the increase in loans. This caused a level shift in various series in January 2010, as well as changing the coverage of various series from January 2010 data onwards. For more details, please see the February 2010 Statistics article "Statistical Reporting of Securitisations".
Changes to the Publication of Bank and Building Societies Statistics
Separate data for banks and building societies have been discontinued from January 2010 onwards. For more details, please see the January 2010 Statistics article "Changes to the Publication of Bank and Building Societies Statistics".
Differences between tables
Changes in the money stock may not equal the differences in the amounts outstanding because of changes in coverage, e.g. changes in the reporting population or sectoral changes (such as privatisations of public sector companies).
Monetary Financial Institutions
With effect from April 1998, a new monetary financial institutions (MFI) sector was introduced, comprising the central bank (the Banking Department and the Issue Department of the Bank of England), other banks and building societies. UK monetary statistics (other than M0) were already compiled on the basis of the MFI sector and there was no change in the definition of the monetary data. This was because the Bank of England Banking Department had always been part of the UK banks' sector and the Issue Department's transactions with the M4 private sector (including transactions associated with its money market operations as well as the note issue) were already included in broad money and its counterparts. Unless otherwise stated, banks will include the central bank sub-sector.
Notes and coin
Estimated non-residents' holdings of sterling notes and coin are excluded from notes and coin in circulation with the M4 private sector.
Non-interest bearing deposits are adjusted for an element of transit and suspense items.
Transit and suspense items
- Transit items appear in banks' and building societies' balance sheets both as credits and debits (e.g. standing orders or cheques in course of collection).
- Suspense items relate to customers' funds that are not held in customers' names.
When reporters' figures are aggregated, these items may give rise to double-counting of deposits received from customers outside the banking system or, where overdrawn or loan accounts are concerned, to the under-recording of total lending made to such customers. The data for deposits and loans are therefore, adjusted with slight variations between banks and building societies to take account of the different types of activity these sets of reporters are predominant in. For banks, these adjustments are effective from February 2006 and for building societies from January 2008. Prior to January 2008, no similar adjustments were required for building societies' transit items because they represented 'uncleared cheque' business with banks and did not therefore give rise to double-counting (as detailed above).
For banks (and building societies respectively):
- 70.4% (84%) and 3.6% (8%) of sterling credit transit items are added to non- interest-bearing deposits from the UK private and public sectors respectively. The remaining 23.6% (8%) and 2.4% (0%), for UK private and public sectors respectively, is subtracted from advances.
- 72% (91%) of sterling debit transit items are subtracted from non-interest-bearing deposits from the UK private sector and 28% (9%) are added to advances to the UK private sector.
- 71% (90%) of sterling credit items in suspense are added to the UK private sector's non-interest-bearing deposits. The remaining 29% (10%) is subtracted from advances to the UK private sector.
- 67% (88%) of sterling debit items in suspense are subtracted from the UK private sector's non-interest-bearing deposits. The remaining 33% (12%) is added to advances to the UK private sector.
- For foreign currency transit items, the difference between credit and debit items is added to deposits from non-residents.
- 39% (39%) of foreign currency credit items in suspense are added to non-residents’ deposits and 23% (23%) to UK private sector deposits. The remainder is subtracted from advances, 26% (26%) non-resident and 12% (12%) UK private sector.
- 36% (36%) of foreign currency debit items in suspense are subtracted from non-residents' deposits and 24% (24%) from UK private sector deposits. The remainder is added to advances, 24% (24%) non-resident and 16% (16%) UK private sector.