SUMMARY
There are two main reasons for discrepancies and errors in the recording of international capital flows: failure to follow the conceptual framework in the Fund’s Balance of Payments Manual and difficulties in collecting and compiling the necessary basic statistics. Countries may deviate from the Manual’s recommendations because of legal or institutional arrangements, because of unfamiliarity with the Manual, and because they lack resources or use ineffective statistical methods. This chapter describes some problems that frequently arise in collecting the necessary data and the proposals made by a selection of countries to improve their data. The chapter also discusses the role of Fund staff and staff in other international organizations in helping countries to improve their data.
Conceptual Framework
Under Article VIII, Section 5, of the Fund’s Articles of Agreement, “the Fund may require members to furnish it with such information as it deems necessary for its activities, including, as a minimum necessary for the effective discharge of the Fund’s duties, national data on … international balance of payments.” To provide guidelines for members reporting data and to ensure intercountry compatibility, the Fund issued the first edition of the Balance of Payments Manual in 1948; the most recent (fourth) edition appeared in 1977. The Manual can be viewed as a conceptual framework for the preparation of national balance of payments statistics. It recommends the use of a set of uniform principles for recording transactions and a set of standard components (see Table 9) into which data are to be grouped for reporting to the Fund and for publication by the Fund.
Standard Capital Account Components in the Fourth Edition of the Balance of Payments Manual1
In this report, these standard components are modified to exclude liabilities constituting foreign authorities’ reserves (LCFAR). Such liabilities are deducted from “portfolio investment” and from “other capital” and grouped with “reserves” to be considered jointly as a component “reserves/LCFAR.” Also, see table footnote 5.
Each subcomponent of direct investment is further dissected into “reinvestment of earnings,” “equity capital,” “other long-term capital,” and “short-term capital.”
Each subcomponent of portfolio investment is further dissected into “assets,” “LCFAR,” and “other liabilities.”
With one exception, each subcomponent of other long-term capital and other short-term capital is further dissected into “loans extended,” “other assets,” “LCFAR,” “other loans received,” and “other liabilities.” The exception is short-term capital of deposit money banks, for which separate loans data are not required. Long-term loans are split into “drawings” and “repayments.” LCFAR of deposit money banks are split into “denominated in national currency” and “denominated in foreign currency.”
In this report, “long-term capital” and “short-term capital” are combined. Also, the “other sectors” category sometimes is described as the “nonbank private sector,” although this category includes public corporations.
The title shown here reflects usage in the Fund’s Balance of Payments Statistics Yearbook, 1991. In the 1989 and 1990 issues of the Yearbook, the subcomponent was described as “credit from the Fund and Fund-administered resources.”
Standard Capital Account Components in the Fourth Edition of the Balance of Payments Manual1
| Direct investment 2 | ||
| Abroad | ||
| In reporting economy | ||
| Portfolio investment3 | ||
| Public sector bonds | ||
| Other bonds | ||
| Corporate equities | ||
| Other capital4, 5 | ||
| Long-term capital | ||
| Resident official sector | ||
| Deposit money banks | ||
| Other sectors | ||
| Short-term capital | ||
| Resident official sector | ||
| Deposit money banks | ||
| Other sectors | ||
| Reserves | ||
| Monetary gold | ||
| Special Drawing Rights | ||
| Reserve position in the Fund | ||
| Foreign exchange assets | ||
| Other claims | ||
| Use of Fund credit and loans6 | ||
In this report, these standard components are modified to exclude liabilities constituting foreign authorities’ reserves (LCFAR). Such liabilities are deducted from “portfolio investment” and from “other capital” and grouped with “reserves” to be considered jointly as a component “reserves/LCFAR.” Also, see table footnote 5.
Each subcomponent of direct investment is further dissected into “reinvestment of earnings,” “equity capital,” “other long-term capital,” and “short-term capital.”
Each subcomponent of portfolio investment is further dissected into “assets,” “LCFAR,” and “other liabilities.”
With one exception, each subcomponent of other long-term capital and other short-term capital is further dissected into “loans extended,” “other assets,” “LCFAR,” “other loans received,” and “other liabilities.” The exception is short-term capital of deposit money banks, for which separate loans data are not required. Long-term loans are split into “drawings” and “repayments.” LCFAR of deposit money banks are split into “denominated in national currency” and “denominated in foreign currency.”
In this report, “long-term capital” and “short-term capital” are combined. Also, the “other sectors” category sometimes is described as the “nonbank private sector,” although this category includes public corporations.
The title shown here reflects usage in the Fund’s Balance of Payments Statistics Yearbook, 1991. In the 1989 and 1990 issues of the Yearbook, the subcomponent was described as “credit from the Fund and Fund-administered resources.”
Standard Capital Account Components in the Fourth Edition of the Balance of Payments Manual1
| Direct investment 2 | ||
| Abroad | ||
| In reporting economy | ||
| Portfolio investment3 | ||
| Public sector bonds | ||
| Other bonds | ||
| Corporate equities | ||
| Other capital4, 5 | ||
| Long-term capital | ||
| Resident official sector | ||
| Deposit money banks | ||
| Other sectors | ||
| Short-term capital | ||
| Resident official sector | ||
| Deposit money banks | ||
| Other sectors | ||
| Reserves | ||
| Monetary gold | ||
| Special Drawing Rights | ||
| Reserve position in the Fund | ||
| Foreign exchange assets | ||
| Other claims | ||
| Use of Fund credit and loans6 | ||
In this report, these standard components are modified to exclude liabilities constituting foreign authorities’ reserves (LCFAR). Such liabilities are deducted from “portfolio investment” and from “other capital” and grouped with “reserves” to be considered jointly as a component “reserves/LCFAR.” Also, see table footnote 5.
Each subcomponent of direct investment is further dissected into “reinvestment of earnings,” “equity capital,” “other long-term capital,” and “short-term capital.”
Each subcomponent of portfolio investment is further dissected into “assets,” “LCFAR,” and “other liabilities.”
With one exception, each subcomponent of other long-term capital and other short-term capital is further dissected into “loans extended,” “other assets,” “LCFAR,” “other loans received,” and “other liabilities.” The exception is short-term capital of deposit money banks, for which separate loans data are not required. Long-term loans are split into “drawings” and “repayments.” LCFAR of deposit money banks are split into “denominated in national currency” and “denominated in foreign currency.”
In this report, “long-term capital” and “short-term capital” are combined. Also, the “other sectors” category sometimes is described as the “nonbank private sector,” although this category includes public corporations.
The title shown here reflects usage in the Fund’s Balance of Payments Statistics Yearbook, 1991. In the 1989 and 1990 issues of the Yearbook, the subcomponent was described as “credit from the Fund and Fund-administered resources.”
In issuing the fourth edition of the Manual, the Fund took into account the views of statisticians in national balance of payments offices. Preferences among these individuals and among Fund staff did sometimes differ widely. Reconciliation of the divergent opinions helped, however, to ensure that the Manual’s recommendations were realistic and generally acceptable to compilers.
The Fund is currently drafting the fifth edition of the Manual. Appendix II of this report describes the recommendations of the draft edition as it relates to capital account recording. The definitions and classifications proposed in the fifth edition should serve present needs more adequately as well as facilitate capital account recording. The revised Manual will be accompanied by an updated version of the Statistics Department’s Balance of Payments Compilation Guide (Compilation Guide), which will contain suggestions to national compilers on data collection techniques.
Work on the fifth edition of the Manual started in the 1980s at about the same time that the United Nations Statistical Office began revision of its System of National Accounts (SNA). Although the balance of payments is encompassed, in principle, within the national accounting framework, in practice there are numerous differences between the fourth edition of the Manual and the unrevised SNA. The need for compatibility between the two standards is one reason both are being revised.
In compiling national balance of payments accounts, strict compatibility with the principles of the Manual is rarely achieved. First, many countries do not compile data in accordance with the definitions or data classifications specified in the Manual.9 Second, many countries have difficulty collecting and compiling the necessary basic statistics. However, unless balance of payments compilers follow the Manual, it is impossible to construct meaningful and consistent aggregations of important economic transactions or to analyze effectively the financial relations between countries. The surveillance function of the Fund, the operations of other international organizations, the requirements of domestic policymakers, and the need for national compilers to exchange data require compatibility of data between countries and across time. Therefore, national compilers should prepare balance of payments accounts in accordance with the Manual; they must report data to the Fund in this form.
Deviations from concepts in the Manual come about for a variety of reasons. In some countries, balance of payments compilers may not be sufficiently familiar with recommendations in the Manual and may unwittingly deviate from them. The Working Party therefore supports the Fund’s program to provide training to national officials on balance of payments methodology.
In other countries, compilers may possess the information they need to follow recommendations in the Manual but knowingly deviate from them in national publications. For example, some national compilers argue that legal and institutional arrangements in their countries justify, or require, deviations from the Manual’s recommendations, more particularly from its classification of transactions. Such compilers must provide the Fund with additional information to “bridge” the national presentation and the Manual’s standard components. On the basis of this information and within the requirements for confidentiality, the Fund can then publish the national statistics in an internationally consistent format.
Finally, because of a lack of resources or ineffective statistical methods, compilers in many countries may not be able to collect all the data specified in the Manual nor data that are correctly valued and recorded in the proper time period. For example, compilers should collect and report to the Fund data on all transactions affecting their countries’ foreign financial assets and liabilities. Some compilers may not be in a position to collect the data needed because they do not know who the transactors are, because they lack the necessary resources, or because the transactors (or intermediaries) are unwilling or unable to provide the required information. Such measurement problems require a general strengthening of the statistical apparatus.
Common Methodological Problems
Achieving Adequate Coverage
Balance of payments compilers usually do not have access to a unified and internally consistent set of accounting data that are comparable with company accounts; they use data from many sources. It is difficult for any national collection system to cover all the types of international capital flows. An acceptable system must not only provide sufficient coverage, it must produce timely results to satisfy users of the data (especially policymakers), and it must also minimize collection costs and burdens imposed on data suppliers.
Over the years, as international transactions have increased and become more complex, the task of data collection has become more difficult. Options for collecting the data, however, have remained very much the same. Compilers may choose between collecting data on individual transactions or on transactions aggregated over a period of time, between collecting data from transactors or from intermediaries, and between collecting data on flows or on stocks. In fact all of these options are employed, and many countries use a range of sources in collecting capital flow data. As circumstances differ from country to country, the Working Party does not advocate the uniform application of any specific data collection system, but it does advocate that the collection be as complete as possible.
However, it is clear from evidence provided by a number of countries that an increasing number of capital account transactions are slipping through gaps in the collection systems. For example, the system employed in the United States was designed when most transactions were conducted in conventional financial instruments and channeled through a few large banks and other financial institutions. Capital markets have changed dramatically since then, so that statistical problems faced by the U.S. compilers have intensified and strained available resources. Another example is the Japanese collection system. This system essentially measures transactions effected through cash payments and fails to take account of increasingly important non-cash transactions such as reinvestment of earnings and other transactions via intercompany accounts.10 Therefore, national authorities should keep their statistical systems under review and adapt them quickly to the changing international financial environment. They must ensure that their systems provide comprehensive coverage of all transactions.
In many instances, it may be possible to fill the gaps in coverage, improve the quality of data, eliminate duplication, and contain the costs of collection by arranging the exchange of aggregate data between statistical compilers in partner countries. If such exchanges are based on comprehensive data and common definitions, they can be an important tool for identifying and eliminating the gaps in coverage. Exchanges of capital flow data can also be extremely useful at the national level. For countries that collect data through several statistical agencies, the exchange of company-level data can reduce reporting burdens and improve efficiency and data quality. Of course, respondents must be assured that confidentiality will be respected among statistical agencies and that the data will not be used for investigatory, regulatory, or tax purposes. Where necessary, legal authority for such exchanges should be provided. Therefore, compilers should develop regular contacts with related agencies in their own countries, with compilers in other countries, and with international organizations that hold valuable financial data bases.
A common feature of all systems should be the requirement to maintain the quality of data by establishing some independent basis for evaluation or augmentation. The partner country data mentioned previously are valuable for this purpose. Also valuable are the data bases of international organizations such as Fund and BIS data on the external claims and liabilities of banks and World Bank data on external debt of developing countries. Another improvement forms a central theme of this report: national statistical systems should include regular collections of position data to validate and fill gaps in their flow data; these position collections should cover each major type of international asset or liability.
Although the benefits of closing the gaps in data systems should greatly exceed the costs, improvements will not be costless. National authorities should reinforce agencies that compile balance of payments statistics by providing them with the necessary resources, support, and legal powers for data collection.
Defining Residence
Each economic agent is by definition a resident of some economy. In practice, however, a country may choose to define a resident differently from the Manual. For example, foreign-owned banks, trust companies, refineries, and other “offshore enterprises” operating in The Bahamas are being treated, in accordance with national regulations, as nonresident entities. Thus, their transactions with “true” nonresidents are excluded from the balance of payments.11 In the Netherlands Antilles, foreign-owned financial institutions, whose transactions with other local residents are legally limited, are also treated as nonresidents. More generally, the treatment of “offshore enterprises” creates significant discrepancies in major categories of the global accounts (such as direct and portfolio investment).12
Classifying Transactions
Global asymmetries arise in major categories of the accounts when a country does not follow the Manual’s classification of transactions. Many important deviations from the standard classifications are described in later chapters of this report. For instance, a number of countries, including Canada, Japan, France, and Germany have decided that short-term capital flows between direct investors and their affiliates should not be recorded as direct investment (as recommended by the Manual) but in other categories of the accounts.
Correct Timing
In principle, the sale and purchase of an asset should be recorded by both the selling and purchasing economy at the time the change of ownership occurs. In practice, countries may record transactions at different times. Countries that use payment records as a source of data—such as Japan, Belgium, Italy, the Netherlands, Korea, and Colombia—record international transactions when payment is made rather than when ownership changes. Others that use surveys of transactors may record capital flows when ownership changes. However, even for countries using reports by transactors, problems may arise. For example, in the area of direct investment, a parent company may record a transaction (a shipment of merchandise to an affiliate and the corresponding increase in the account receivable from the affiliate) at the time of shipment, whereas the affiliate may record the transaction (the receipt of the goods and the increase in the account payable to the parent) at the time of delivery. This inconsistency in recording dates alone will cause a discrepancy in the accounting for direct investment flows between the creditor and host country.
Deriving Flows from Stock Data
Reports on outstanding claims and liabilities are used in many countries (including the United States, Canada, France, and Germany) to derive capital flows of deposit money banks. They are also used in some countries to derive capital flows associated with other kinds of long- and short-term debts. Changes in stocks or positions reflect multiple factors: bona fide transactions; changes in the market price of assets, such as equity and debt securities; changes in exchange rates (see the discussion in the next section); and other changes, such as write-offs, expropriations, and uncompensated seizures. In principle, all changes other than those associated with transactions should be eliminated when capital flow data are derived from changes in stocks. In practice, compilers are not always aware of some or all of these changes, and some changes are treated differently in the accounts of creditor and debtor countries. Thus, asymmetries can arise in the global accounts from the imperfect translation of stock data into estimates of underlying capital flows.
Foreign Exchange Conversion
Inconsistencies in the recording of capital flows may arise when the values of transactions are translated first into the currencies of each country’s accounts and then the accounts are translated into a common numeraire for the compilation of global statistics, as by the Fund in the Balance of Payments Statistics Yearbook.
Since the bulk of capital transactions involve an exchange of assets, and since both parties are likely to record the exchange at nearly the same time, conversions into national currencies should not be a source of major discrepancies.13 An important exception occurs when the reporting source provides position data and when exchange rates are changing rapidly. In that case, compilers must eliminate changes in asset-liability values that are induced by exchange rate effects in order to arrive at the transactions basis used in the balance of payments accounts. For instance, Fund-BIS banking flow data used in Chapter 6 are derived from stock figures; these data have been corrected for exchange rate fluctuations on the basis of the currency composition of the major components of total banking positions.
As a result of the ways in which national data are sometimes reported, there are also exchange translation problems at the global level when reducing to a common numeraire, such as the U.S. dollar. However, it has not been possible to determine the extent to which such problems affect the capital account discrepancies under review.
Inconsistencies in Company Accounting Standards
Data from the company accounts reported to national compilers may not be fully comparable with data reported by companies in other countries because of differences in accounting practices. In addition, there are unresolved questions in many countries about the treatment of financial innovations. For all these reasons, some divergences in statistical reporting among countries are unavoidable. These unresolved questions have an important effect on the measurement of direct investment flows because different parts of a multinational enterprise may be operating on different accounting standards. This problem could be surmounted if there were more uniform international standards for company accounting.
National Compilations: Improvements Planned
Balance of payments compilers from a number of countries have provided information to the Working Party on aspects of their compilation systems. Among other difficulties, many have encountered problems arising from the lifting of exchange controls, the internationalization of markets, and the proliferation of financial innovations. Many of these problems remain unresolved. As summarized in the following paragraphs, compilers in various countries also have plans for improvements.
Balance of payments compilers in the United States are in the midst of a multiyear effort to improve their international accounts. The effort is part of a presidential initiative to improve U.S. economic statistics. The Bureau of Economic Analysis (BEA) has received incremental funding for interim improvements in methods and source data. Funding for longer-term fundamental improvements in the source data and in the arrangements for sharing data among decentralized U.S. statistical agencies is included in the presidential initiative for 1993 and beyond.
For direct investment, interim changes include developing estimates for nonrespondents; longer-term improvements to enhance coverage in quarterly estimates include the exchange of data between the BEA and the Bureau of the Census and the refinement of tracking, compliance, and processing procedures. For portfolio investment, interim improvements include a variety of measures: an expansion of the sample frame to increase coverage of short-term instruments and of direct transactions with nonresidents by pension funds, mutual funds, and insurance companies; the education of reporters in order to upgrade the quality of banking reports; and the bilateral exchange of data with important U.S. investment partners. Long-term improvements include sharing data between the BEA and the U.S. Treasury to expand the reporting coverage as well as a coordinated 1993 benchmark survey of U.S. portfolio investment abroad.
Canadian compilers are working on several fronts to maintain the adequacy of their statistical system: better monitoring of survey coverage; enhancing systems to process information; working with U.S. compilers to reconcile bilateral capital flows; and developing estimates of the reinvestment of earnings on direct investment.
Australian balance of payments compilers recently developed a methodology to measure all investment in Australian real estate on a regular basis, and other projects are under way to improve coverage of their Survey of Foreign Investment (SFI). These include investigation of new coverage sources, the development of a survey drawn from an alternative population register to quantify as accurately as possible any under-coverage in the SFI, and to identify units not covered by the survey, and the reconciliation of unit record data reported in the SFI with data reported in other collections of the Australian Bureau of Statistics.
In Belgium-Luxembourg, compilers plan in 1992 to introduce a revised classification that is based more closely on the Manual’s classification of capital account transactions. From late 1991, they are recording the transactions of all Belgian-resident “coordination centers” of multinational enterprises in accordance with the Manual’s recommendations. They plan to conduct surveys of stocks of foreign direct investment for purposes of verifying flows and estimating reinvestment of earnings.
In France, work is nearly completed on regulations prescribing the statistical obligations of enterprises, and steps are being taken to collect data on stocks of cross-border assets and liabilities. The expanded stock data will enable corrections to be made to flow data in both the current and capital accounts; they will also provide new data on reinvestment of earnings on direct investment and more precise measures of trade credit. Since 1989, stock data have been collected covering French direct investment abroad and investment in portfolio securities. In the future, compilers will also collect stock data on foreign direct investment in France and on other claims and liabilities of the private nonbanking sector.
In Germany, compilers are reviewing the new channels and instruments for international capital flows by directly approaching institutional investors and banks. In addition, they are changing reporting regulations (for financial derivatives, for example). They are also investigating whether statistics available in other countries or international organizations could help to close gaps (which they assume are mainly the result of insufficient reporting by individuals, especially regarding their transactions with foreign banks) in their compilation system. German compilers also plan to expand their bilateral comparisons of balance of payments statistics with certain partners.
The liberalization of capital movements in Italy, completed in 1990, rendered obsolete a system of balance of payments collection that had been a by-product of the exchange control system. Italian compilers introduced a new procedure for collecting data in 1990. All residents are now required to transmit to the Foreign Exchange Office data on foreign transactions exceeding the equivalent of Lit 20 million. In addition, banks are required to provide information on both their own external assets and liabilities and on customers’ operations. That information is part of a more general reporting framework for banking operations, which includes reporting transactions between residents. The new Italian system does not measure international capital flows as comprehensively as did that system in place before the liberalization of capital movements; however, no major reassessments of the new system are envisaged in the near future.
Plans for improvements in Switzerland include the use of reports by companies to obtain transactions data for all components of direct investment flows and for portfolio investment. At present, transactions data are derived from balance sheet data. Data on assets and liabilities of resident nonbanks vis-à-vis nonresident banks shown in the Eurocurrency statistics of the BIS will be partly incorporated in the capital account. In addition, Swiss compilers will begin treating the BIS (hitherto a “resident” bank in some parts of the Swiss statistics) as a nonresident institution, in accordance with Manual norms for international organizations.
One long-term objective of compilers in the United Kingdom is to improve the coverage of the corporate sector by obtaining reports on overseas transactions from the transactors themselves rather than from intermediaries. This approach already has led to substantial revisions in the estimates of nonfinancial companies’ holdings of overseas portfolio assets, and improvements are being made in data for the financial sector, for example, in private pension funds. As for the flow of capital into the country, data on foreign investment in U.K. equities have been improved by the introduction of an annual share register survey. Furthermore, the extension of corporate reporting is expected to improve coverage of foreign investment in U.K. companies’ nonequity securities, and it has improved coverage of various short-term liabilities to nonresidents. In addition, some work is being considered to improve the estimates of overseas property transactions by individuals through surveys of estate agents. The use of a household survey and a survey of fund managers is also being considered to measure international transactions by individuals.
The Role of the Fund and Other International Organizations14
The Fund has a central role in the compilation and analysis of world balance of payments statistics. Although its efforts to promote standardization and attain comprehensiveness in the recording of international transactions have achieved considerable success, many problems remain unsolved. The Working Party makes several recommendations touching on the Fund’s contribution to better statistics.
The development of the fifth edition of the Manual and the update of the Compilation Guide (both presently in draft form) represent an important step by the Fund in assisting countries to improve their capital account compilations. The Working Party recommends that compilers pay close attention to the Manual and the Compilation Guide as they work to improve their systems in accordance with the recommendations of this report.
The Fund should also continue its efforts to support the development of adequate data systems and train balance of payments statisticians. The staff should proceed, with even greater vigor, in its efforts to advise on procedures, data deficiencies, and timely provision of data. It is essential that the Statistics Department provide oversight of developments in the global balance of payments (particularly its main categories) and maintain the focus on individual countries. In that connection, a follow-up to the recommendations of this report and the Report on the World Current Account Discrepancy should receive high priority and adequate staff resources. Also, in the Fund’s training courses on balance of payments methodology, additional attention should be paid to the practical aspects of data collection.
The Fund must keep up with the statistical implications of changes in the ways that international trade and finance are conducted. It should seek the advice of financial experts and national compilers possessing specialized experience in financial markets. Through such collaboration, the Fund should update the Manual on a more frequent basis to accommodate changes in the economic and financial environment. Updates to the Manual should be widely disseminated. These updates should be covered in the Fund’s training programs.
Finally, other international organizations also have an important role to play in ensuring adherence to international standards, in encouraging improvements in data quality, and in collecting and disseminating balance of payments data with respect to their members.15 A number of these organizations gather balance of payments figures from their members in a rather uncoordinated fashion. Greater uniformity is desirable and surely would reduce the burdens on data suppliers. Because the Manual represents the views of a wide spectrum of Fund members, it is recommended that international organizations that collect balance of payments statistics request that these data conform to the Manual’s definitions and classifications.
Conclusions and Recommendations
There are two main reasons for discrepancies and errors in the recording of international capital flows: failure to follow the conceptual framework of the Fund’s Balance of Payments Manual and difficulties in collecting and compiling the necessary basic statistics. Countries may deviate from the Manual’s recommendations because of legal or institutional arrangements, because of an unfamiliarity with the framework, or because of a lack of resources or ineffective statistical methods.
The importance that the Working Party assigns to compiling balance of payments data in accordance with the Manual is based on the severe comparability and classification problems that ensue when countries follow disparate systems with little regard for standardization. The imbalances that result are hard to distinguish from operational imperfections in capital flow measurement. Countries must at the same time take steps to identify and reduce gaps and imperfections in their data systems. Both kinds of actions are necessary to prevent inconsistencies between country data and growing world discrepancies, to permit the exchange of data, to facilitate the Fund’s surveillance function, and to support domestic policymakers.
It is possible to fill gaps in coverage, improve data quality, eliminate duplication, and contain collection costs by exchanging aggregate data among statistical compilers in different countries. Also, countries that collect company data through several statistical agencies can exchange such data in order to reduce reporting burdens and improve efficiency and data quality.
The Fund has a central role in promulgating adherence to international statistical standards, encouraging comprehensiveness and accuracy in the recording of international transactions, and collecting and disseminating data. Some other international organizations also have an important role to play in improving capital account statistics.
The Working Party’s major recommendations arising from this chapter are
-
National authorities should reinforce statistical agencies that compile balance of payments statistics by providing them with the necessary resources, support, and legal powers for data collection.
-
National compilers should prepare balance of payments accounts in accordance with the Manual; they must report data to the Fund in this form.
-
National authorities should keep their statistical systems under review and adapt them quickly to the changing national and international financial environment. They must ensure that their systems provide comprehensive coverage of all transactions.
-
National statistical systems should include regular collections of position data to validate and fill gaps in their flow data.
-
Compilers should develop regular contacts with related agencies in their own countries, with compilers in other countries, and with international organizations that maintain valuable financial data bases.
-
The Fund’s Statistics Department should oversee developments in the global balance of payments (particularly its main categories) and maintain the focus on individual countries. In that connection follow-up to the recommendations of this report and the Report on the World Current Account Discrepancy should receive high priority and adequate staff input.
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The Fund should update the Manual on a more frequent basis to accommodate changes in the economic and financial environment.
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Other international organizations that collect balance of payments statistics should request that data be reported according to the definitions and classifications of the Manual.