Valuation and breaks
Transit and suspense items
Holdings of M4 by and M4 lending to other financial corporations, private non-financial corporations and the household sector are affected by the allocation of reporters' transit and suspense items. For further details, see the notes to the ‘Monetary financial institutions' consolidated balance sheet’.
Credit card data
Credit card data include data from building societies from 1992 Q4 onwards.
Banking Statistics Review
Revised banking statistics returns were introduced at the end of September 1997 to bring the UK into line with the European Systems of Accounts Standards 1995 (ESA95). This led to changes in the definitions of economic sectors. In particular, unlimited liability partnerships were re-classified into private non-financial corporations (PNFCs) and other financial corporations (OFCs) from the household sector. Adjustments were made to minimise the breaks in the time series of financial flows.
As a result of these changes, the ‘individuals’ component of household sector M4 was only available quarterly, one month in arrears. For further details, see the Statistics article 'Outcome of the review of banking statistics, including effects on monetary and other banking statistics'.
Monthly sectoral data
As a result of the introduction of the new banking statistics returns at end-September 1997, comprehensive monthly sectoral data became available. Data from July 1996 to August 1997 are based on reporting by only about 100 banks, grossed up to represent the total banking sector. Data from September 1997 onwards have the same comprehensive coverage as the quarterly sectoral series.
Before September 1997, sectoral data for a short period was reported monthly on the Q1(M) form. Before July 1996, sectoral data was reported to us on a quarterly basis only on the Q1 form.
Building Societies Statistical Review
In October 1998 a revised monthly building society form was introduced, bringing the building societies into line with ESA95 standards, and breaks in series occurred as definitions changed.
In order to bring their treatment into line with that in the national accounts, housing associations were reclassified from non-profit institutions serving households in the household sector to private non-financial corporations in August 2005. Flows were adjusted for the change to both sectors. Level data however were not break-adjusted.
Building societies transition to Bank of England reporting
Building societies' statistical reporting transitioned from the Financial Services Authority to the Bank of England on 1 January 2008, and some minor changes to the calculation of the sectoral analysis of M4 and M4 lending were implemented. The effects of these have been removed from the flows data, and are small in terms of the amounts outstanding unless otherwise footnoted.
From January 2010 data onwards, all loans that have been securitised by MFIs are included on the institutions' balance sheet for statistical reporting purposes. Some institutions reported securitisations on balance sheet before 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 special purpose vehicle was also brought on balance sheet, 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, see the Statistics article 'Statistical reporting of securitisations'.
Changes to the treatment of loan transfers
The treatment of loan transfers was changed from May 2015 to exclude their effects from all measures of net lending and include their effects in all measures of amounts outstanding from January 2010 data onwards. This affected the M4 lending (M4L, which was renamed as ‘M4L (historical measure)’) net lending measures and the ‘M4 lending excluding the effects of securitisations and loan transfers’ (M4Lx, which was renamed as M4L), amounts outstanding measures. As both measures became identical from January 2010 data onwards, the ‘M4L (historical measure)’ ceased after March 2015 data. For more details about this change, see the Statistics article ‘Changes to the treatment of loan transfers and lending to housing associations'.
Treatment of securities
We have collected data for MFIs’ holdings of securities issued by IOFCs and NIOFCs have since January 2014. We have used these data to improve the calculation of the M4 lending excluding IOFCs measure, as securities issued by IOFCs were previously estimated. For further details, see the Statistics article ‘Improvements to the compilation of M4 lending excluding intermediate OFCs series and the publication of additional Monetary Financial Institutions’ data’.
From February 2014 data onwards, transfers of quoted shares have been omitted from net securities flow series, bringing their treatment more into line with our approach to transfers of loans. For more details about this change, see the Statistics article ‘Changes to the treatment of securities transactions in the Bank of England’s monetary statistics’.