The IMF's Statistical Systems in Context of Revision of the United Nations' A System of National Accounts
Chapter

22 The Financial Sector

Author(s):
Vicente Galbis
Published Date:
September 1991
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Author(s)
Edward W. Saunders

Financial innovation in recent years has been characterized not only by the introduction of new financial instruments and changes in the nature of existing instruments, but also by the continuing blurring in the nature of financial intermediation services offered by various types of financial institutions. The traditional banking institutions are conducting business differently and other institutions are increasingly undertaking traditional banking functions. These developments call into question the meaningfulness of the existing focus on the narrow measure of money embodied in the “Monetary Survey” of the IMF's draft Guide to Money and Banking Statistics (MBS Guide) and also, implicitly, in the United Nations' A System of National Accounts (SNA). This paper deals with the delineation of the financial institutions sector (hereafter referred to as the financial sector) in relation to other sectors, and with that of subsectors within the financial sector.1 It reviews the question of the narrow measure of money and concludes that, from the perspective of financial analysis, the financial sector should be subsectored in such a way as to focus on a level of consolidation that is broader than that of the present SNA and the draft MBS Guide.

The following section deals with the definition of financial institutions in the SNA, the draft MBS Guide, and the European System of Integrated Economic Accounts (ESA).2Section II deals with the subsec torings of the financial sector in the SNA and in the Fund's money and banking statistics (MBS) published in International Financial Statistics (IFS).3Section III reviews the boundary issues involved in delineating between the financial sector and other sectors and between subsectors of the financial sector.

I. The Definition of Financial Institutions

Financial institutions are defined in both the SNA and the draft MBS Guide as “incorporated and unincorporated enterprises which are primarily engaged in financial transactions in the market consisting of both incurring liabilities and acquiring financial assets.”4 There is therefore the need to distinguish financial activities recorded in the financial sector from related services provided by institutions that do not, or do not on a major scale, incur liabilities and acquire financial assets. Some of these services may have a close relation to the activities of deposit money banks, whereas others relate more closely to those of other financial institutions or to those of both of these subsectors of the financial sector. These services include those provided by securities brokers, dealers, flotation companies, commodity brokers, and loan brokers that are included in the financial sector only if they incur liabilities and acquire financial assets on their own account. If their activities do not meet this criterion, they would be attributed to the nonfinancial sectors.

Other intermediary services that would be classified to nonfinancial sectors are those provided by agencies whose principal function is to guarantee by endorsement bills or similar instruments intended for discounting or refinancing by financial institutions. Also excluded from the financial sector are those services provided by security and commodity exchanges for the purpose of trading in shares, bonds, other securities, commodities, or gold; exchange clearinghouse services in connection with securities and commodities; foreign-currency exchange services at the retail level; check-cashing services; the issuance of travelers' checks and money orders; the rental of safe deposit boxes and vault space; and similar services. Also classified as nonfinancial sector activities are services closely related to the purchase and sale of securities and commodities—for example, investment research, counseling and advisory services, and stock quotation services; and services provided by committees or other formal groups organized for the protection of securities holders and royalty owners. Services of this nature are frequently provided by financial institutions themselves as integral parts of their financial activities. However, it is not proposed that attempts be made to adjust balances of financial institutions to exclude the recording of such services; that is, the removal of ancillary services from the accounts of financial institutions and their recording in the accounts of nonfinancial sectors is not required.

In recent years, some (mainly industrial) countries have seen a considerable growth in the issuance by nonfinancial entities of money market instruments that are close substitutes for the equivalent bank liabilities. The question arises whether such activities should be included in the financial sector. In this regard, it should be noted that the ESA classifies holding companies directing a group of companies, the majority of which are classified as credit institutions, to the financial sector. It would also classify as financial institutions those statistical units that are internal financing arms of nonfinancial enterprises (such as the General Motors Acceptance Corporation in the United States) as long as they maintain a full set of accounts and have autonomy in decision making. Although the SNA is not explicit with regard to the sectorization of holding companies and internal financing arms, its definition of an institutional unit—as “the unit of narrowest scope which receives and disburses income and buys and sells property, and which always has complete profit-and-loss and balance sheet accounts”—would suggest that its treatment is consistent with the ESA. The draft MBS Guide does not specifically mention how such units should be treated.

II. Subsectoring of Financial Institutions

The subsectors of the financial sector set out in the SNA and the draft MBS Guide were formulated at a time when the focus of monetary analysis was often on a narrow measure of money comprising currency and transferable deposits. It is generally recognized, however, that innovations in the field of finance, such as credit cards and the electronic transfer of funds, raise questions about the measurement of an economy's means of payment, and that some innovations are calling into question the concept of “transferable” deposits that underlies the narrow measures of money embodied in the SNA and the draft MBS Guide.

Thus, the historical relationship between narrow money and income has weakened, particularly since the mid-1970s. In most countries demand deposits do not bear interest, and in periods of high inflation and high interest rates there have been substantial shifts out of demand deposits and into interest-bearing accounts. Substitutions between interest-bearing accounts and demand deposits have become easier as a result of innovations, particularly in those countries where facilities for the electronic transfer of funds exist, and as a result of institutional changes. For example, in some countries the transfer of funds from savings accounts with other banking institutions to checking accounts with deposit money banks has become a straightforward procedure. As a result, the proliferation of convenient alternatives for holding money, together with the very high opportunity cost of holding cash assets or assets that earn interest at well below market rates because of regulatory ceilings, has weakened the relationship between income and narrow money and has therefore led many countries to adopt broader measures of money.

The MBS takes the view that, although a notion of money should continue to be the guiding principle for subsectoring, the measure of money employed should be a broad one. The primary division of the financial sector in the MBS is between the bank and the nonbank subsectors. The banking subsector is defined as all institutions that accept liquid deposits and issue debt-type instruments or their substitutes that are likely to be considered a temporary store of value by their holders. Typically it comprises the monetary authorities, deposit money banks,5 and other banking institutions. The last of these groupings in the MBS comprises those institutions that issue money substitutes. This group includes savings banks, credit cooperatives, mortgage banks, government development banks, and offshore banking units.6 The remaining institutions in the MBS, termed non-bank financial institutions, include life insurance and pension funds, trust and custody accounts, real estate investment trusts, other pooled investment schemes, and compulsory savings schemes. This primary division in the MBS differs substantially from the SNA and the ESA. The SNA divides the financial system into monetary institutions (comprising the central bank and other monetary institutions), insurance companies and pension funds,7 and other financial institutions. The SNA subsector for other financial institutions comprises the MBS subsector for other banking institutions together with sales finance, hire purchase and other business and personal finance companies, money lenders, securities brokers, and investment companies, funds, societies, and trusts. This has resulted in the inclusion of a large and growing group of other banking institutions that can operate in a way similar to monetary institutions within a residual sector in the SNA.8

The ESA has as its primary focus credit institutions, which roughly encompass all financial institutions other than insurance companies and pension funds. The group of “other credit institutions” is more inclusive than the MBS group of other banking institutions because it comprises, in addition, investment companies and credit agencies that do not issue debt-type instruments and stockbrokers and jobbers that act as the other party in buying and selling securities. An analytical consolidation of credit institutions suggests that the focus of the analysis should be on credit extended by all financial institutions. However, this may not be desirable because, although credit provided by insurance companies may be indistinguishable from credit provided by banks, the liabilities of insurance companies are intrinsically different from those of banks because they are of an indeterminate nature. This difference would make difficult the compilation of a consolidated statement of the accounts of all financial institutions within the balance-sheet approach followed by the SNA and the MBS. Thus the SNA and the MBS do not focus on a set of credit institutions.

A broad measure of money as embodied in the “Banking Survey,” which consolidates the accounts of all institutions classified in the bank subsector, forms the basis of the MBS framework for four reasons. The first is based on the trend in national practice and Fund program design to use a broad monetary aggregate when adopting a policy of monetary targeting or monitoring. Second, a broad measure that covers the full range of instruments and their issuers internalizes substitutions that may occur among instruments and should therefore have a more stable demand function. This is particularly important during a period of rapid financial innovation and reform. A third reason is that a broad measure as a basis for standardization permits the internalization of differences across countries. Finally, a broad measure that is as inclusive as possible of the liquid liabilities of a particular set of issuers improves the identification of its net asset counterparts in net domestic assets, in that it does not require the interpretation of quasi-monetary liabilities as offsets to credit. This broad measure of money includes currency and all deposits with banks (except those which are not liquid because of restrictions relating to government policy) as well as any deposit substitutes and other liquid instruments issued by banking institutions.

Although the preference in the MBS is that the focus should be on a Banking Survey, this does not mean that provision should not be made for other levels of consolidation. Three options are discussed below and are summarized in Table 1, which also compares the existing subsectorings in the SNA, the draft MBS Guide, and the ESA.

Table 1.Classification of Financial institutions
Options for MBS (Revised)
SNADraft MBS GuideESA123
Monetary sectorMonetary sectorCredit institutionsBanking sectorBanking sectorBanking sector
Central bankMonetaryCentral bankingMonetaryMonetaryMonetary
authoritiesauthoritiesauthoritiesauthoritiesauthorities
Other monetaryDeposit moneyOther monetaryBanksBanksBanks
institutionsbanksinstitutionsDeposit moneyCore banks
banks
- - - - - - - -- - - - - - - -Other creditOther bankingNoncore banks
institutionsinstitutions
Nonmonetary
Insuranceinstitutions- - - - - - - -- - - - - - - -- - - - - - - -- - - - - - - -
companies and
pension funds
Other financialOther bank-like
institutionsinstitutionsInsuranceNonbanksNonbanksNonbanks
enterprises
InsuranceInsuranceInsuranceInsurance
companies andcompanies andcompanies andcompanies and
pension fundspension fundspension fundspension funds
Other nonbankOther nonbankOther nonbankOlher nonbank
financialfinancialfinancialfinancial
institutionsinstitutionsinstitutionsinstitutions
Note: - - - - - - - - Indicates main level of analytical consolidation.
Note: - - - - - - - - Indicates main level of analytical consolidation.

There clearly are several advantages in using a broad definition of banks for an analytical consolidation, but such a focus does not preclude the use of narrower measures where warranted by analytical objectives and country-specific circumstances. Indeed, there are some reasons for preferring a narrower consolidation. The draft MBS Guide, the SNA, and the ESA have an intermediate level of consolidation, in MBS terminology referred to as the “Monetary Survey,” that has often been used as the main level of consolidation. The monetary sector includes the central banking institution (in the SNA) or the monetary authorities (in the MBS), as well as other monetary institutions (in the SNA) or deposit money banks (in the MBS). Deposit money banks are defined in terms of their issuance of transferable deposits in the SNA, the ESA, and the draft MBS Guide. The SNA and the ESA include all issuers of such deposits, whereas the draft MBS Guide includes only those institutions that have appreciable liabilities in the form of transferable deposits.9 It could be argued that there continues to be merit in separately identifying other monetary institutions (SNA) or deposit money banks (MBS) and consolidating their accounts with those of the monetary authorities to produce a Monetary Survey. Measures of Ml (comprising currency and demand deposits) are still used in some countries for targeting, and there is significant standardization among countries in such definitions. In the same way that the definition of the Banking Survey is derived from the financial institutions that issue broad money, the definition of the Monetary Survey would continue this pattern and be derived from the issuance of narrower money. In this case the division of financial institutions would be completely determined by the type of monetary liabilities they issue.

Alternatively, it could be argued that the view that deposit money banks are different from other banks in that they can “create deposit money” is no longer valid and that analytical consolidations should therefore always be as inclusive as possible of all banks. In practice, deviations from this criterion of inclusiveness can occur, but for essentially pragmatic reasons (for example, the unavailability of current and detailed data from some banks). The normative conclusion would seem to be that the authorities should be encouraged to overcome these problems (particularly where the omission is or will become significant) and aim for a Banking Survey that would be as complete as possible. A secondary issue with this approach is the loss of data for a previously separately identified group—other monetary institutions or deposit money banks.

The third option given in Table 1 reflects the view that the choice of a monetary target depends not only on the stability of its money demand function but also on the controllability of the aggregate. This rests on the assumption of a stable relationship between this narrower aggregate under control and broader aggregates and the ultimate targets.10 The subset of “core” banks on which national authorities may focus their monetary policy may be the result of the concentration of banking activity (for example, in many developing countries the commercial banks dominate the financial system, and other banking institutions are not significant) or of the limitations of existing banking legislation. In practice, the banking institutions over which the monetary authorities have some special control tend to be the issuers of demand (transferable) deposits, or “deposit money.” The reasons for this include the perceived need of the authorities to have special control over the issuers of the means of payment in order to ensure the stability of the payments system and to limit the size of the money multiplier. The danger of focusing on some core group of banks is the fact that the resulting set of institutions would be based on subjective and ad hoc decisions for individual countries and might therefore not be amenable to incorporation in a standard international classification scheme.

III. Boundary Issues

The MBS sectoring of financial transactors closely parallels sectoring in the SNA, but there are some important differences. Although the MBS does not normally extend functionally defined sectorization beyond assigning each institutional reporting unit to a specific transactor group, a few specific exceptions to this rule are made in order to differentiate clearly between the financial system and the nonfinancial public sector, and between subsectors of the financial system.

These exceptions are intended to promote the uniform treatment of certain important functions normally performed by financial institutions but sometimes also undertaken by the treasury or by other units of the central government, such as the issue of currency, the holding of official reserves, and transactions with the IMF.11 Notional financial units are created, principally within the category of central government, and certain financial claims and liabilities are attributed to these notional units, with any net uncovered balance of claims (or liabilities) regarded as an imputed liability to (or claim on) the functionally defined central government. These notional financial units are consolidated with their nearest SNA subgroups of financial transactors, but different terms are used to identify the resulting subsectors of the financial system in order to emphasize the differences in definition. As noted previously, the MBS financial system thus comprises monetary authorities (rather than the central bank, as in the SNA)f deposit money banks (rather than other monetary institutions), other banking institutions (which comprise a part of other financial institutions), and nonbank financial institutions (which are equivalent to the SNA subsector of life insurance and pension funds plus part of other financial institutions). The various “reroutings” made in the MBS for the subsectors of monetary authorities and the deposit money banks are described below.

The Monetary Authorities

The monetary authorities perform a variety of functions. As issuers of currency, they provide the economy with notes and coins that constitute the recognized means of payment. As holders of the economy's international reserves, they stand ready either to accept and provide foreign currencies in exchange for their own as needed for balance of payments purposes or to make adjustments to the exchange rate for the national currency. As supervisors of the financial system, they must aim to determine the appropriate level of liquidity for the domestic economy, as well as for banks, and to influence the development of financial institutions' assets and liabilities accordingly. As the principal financial agents of the central government, they are called upon to validate the government's transactions by both providing credit to, and absorbing the surplus funds of, the government.

In many countries the central bank or a similar body, such as a currency board or a monetary agency, has sole responsibility for all such functions. In other cases some of these functions are partially or entirely carried out by the central government, or by financial institutions other than a centralized one. The MBS considers that, in order not to obscure the distinction between monetary and fiscal analysis, it is necessary for the monetary authorities' accounts to encompass all financial assets and liabilities ascribed to the performance of monetary authority functions. This approach differs from that of the SNA and the ESA, where monetary authority functions carried out by bodies other than the central bank in most instances are left in the accounts of the institutional sectors where those bodies are placed—usually the government sector. However, in view of the difficulty of designing objective criteria for identifying the government accounts that are linked to monetary authority functions, the MBS undertakes to adjust only those accounts that are quite clearly linked to the two main monetary authority functions—that is, the issue of currency and the management of international reserves, including those resulting from transactions with the Fund.

Historically, governments have exercised a monopoly with regard to the issuance of currency, which originally was in the form of coins. Bank notes have long since replaced coins as the major form of currency, however, and most governments have transferred responsibility for the issue of bank notes to the central bank. Some, but by no means all, governments have also transferred the right to issue coins to the central bank. Where governments have retained control over the currency issue (either coins or bank notes), the accounts associated with this function are consolidated with the monetary authorities' accounts in the MBS, but not in the SNA or the ESA.

With respect to the second function, the MBS consolidates in the monetary authorities' accounts foreign claims held by the central government to the extent that they are assets generally recognized as a means of international settlement (for example, gold, deposits with nonresident financial institutions, marketable securities issued by foreign central governments, and other instruments negotiable in external money markets). The MBS does not, however, consolidate the foreign claims held by banks or by nonfinancial public enterprises, even though these may be under the effective control of the central authorities.

Also consolidated are exchange stabilization funds. National sources sometimes exclude exchange stabilization funds from the central banks' accounts when the central bank does not legally own the country's international reserves but rather administers them on the government's behalf through a separate accounting unit such as a foreign exchange or currency stabilization fund. Under such an arrangement, the central bank's balance sheet is likely either to report a claim on the exchange stabilization fund or to subsume such a claim in broader categories of claims on the government. Without an adjustment for such differences in institutional arrangements, developments in central bank holdings of government debt could take on quite different meanings for countries with and without exchange stabilization funds. In the latter case, changes in the central bank's position in relation to the government would reflect the government's recourse to the central bank only for the implementation of what is conventionally regarded as deficit financing and sterilization of surplus funds. In the former case, it would also reflect the government's call upon the central bank to influence the external value of the local currency through intervention in foreign currency markets. So that the analysis will not be obscured by the institutional arrangements in effect in a given country, the MBS consolidates separate funds of this type with the formal balance sheet of the central bank. The reserve assets booked to these separate funds are treated as holdings of the central bank, and an offsetting contra-entry is made to the central bank's position with the government, usually by deducting such funds from the central bank's holdings of government debt.

The final rerouting made in the MBS to derive the accounts of the monetary authorities concerns accounts with the IMF. A country's accounts with the Fund comprise those arising from its transactions with the Fund's General Department, those with its SDR Department, and its Trust Fund loans outstanding. In cases where one or more of these accounts are held by the central government (treasury) rather than the central bank, the necessary reroutings are made in the following manner.

•Treasury IMF (TIMF) accounts, which measure the treasury's position with the Fund's General Department, are calculated as the difference between the member's overall position with that Department (reserve position in the Fund less use of Fund credit, as shown in the Fund's records) and the net of claims on, and liabilities to, the General Resources Account as recorded in the central bank's balance sheet. The precise form of the adjustment varies according to each country's institutional arrangements for operations with the General Department, but the end result is always the same: the central bank's claims on the treasury are reduced when the treasury is a net claimant on the General Department, and they are increased when it has incurred net obligations to the General Department.12

•A country's participation in the Fund's SDR Department may also be partially, or entirely, recorded in the treasury's accounts. Again, Fund records are compared with items in the balance sheet of the central bank in order to determine the country's arrangements for the holding and allocation of SDRs. The country's total holdings of SDRs are included in the measure of foreign assets of the monetary authorities, and total net cumulative allocations of SDRs are included in the time series on capital accounts. In the event that SDRs are held by the treasury, an adjustment is made to the time series on the monetary authorities' claims on central government. This contra-entry is calculated by deducting treasury holdings of SDRs from net cumulative allocations of SDRs received by the treasury.

•The Fund's IFS measures of monetary authorities' foreign liabilities include IMF Trust Fund loans outstanding, irrespective of whether the country's practice is to record such obligations as a debt of the treasury or of the central bank. Hence, to the extent that such liabilities do not appear in the balance sheet of the central bank, the Fund's record of the amount of such obligations is included in foreign liabilities, and a contra-entry is made to the monetary authorities' claims on central government.

The unifying theme underlying all three of these contra-entries for TIMF accounts is that Fund resources are intended to provide balance of payments financing rather than government financing. Moreover, a country's transactions with the Fund cannot, in and of themselves, alter a country's net financial position with the rest of the world, except through the creation of international liquidity that occurs as a result of net cumulative allocations of SDRs. This is because all other transactions with the Fund either involve the exchange of one foreign asset for another (as when a member reduces its reserve position in the Fund by purchasing the currencies of other members) or result in offsetting changes in foreign assets and foreign liabilities (as when a member makes use of Fund credit in order to purchase the currencies of other members). Treasury transactions with the Fund usually give rise to related, and essentially simultaneous, transactions between the treasury and the central bank. For example, when the treasury issues securities to the Fund in order to purchase the currencies of other members, it will transfer the foreign currencies so obtained to the central bank and will obtain an equivalent amount in domestic currency either through a reduction in the central bank's claims on the treasury or through an increase in its deposits with the central bank. Hence, in this example, without an adjustment to its accounts, the central bank would report an increase in its net foreign position and a decrease in its net claims on the treasury because the treasury, rather than the central bank, transacted with the Fund. The purpose of each of the above-mentioned contra-entries made in the MBS for Fund-related transactions attributable to the treasury is to recognize the implications of the related treasury or central bank transactions on the central bank's account.

The SNA recognizes that these central bank-like functions may be performed outside of the central bank in some cases, but it adopts a different approach to displaying the relationships involved. Because it is concerned with all of the activities of the economic agents whose accounts it presents and not just one particular aspect, such as their role in financial intermediation, the SNA considers it important that the institutional integrity of the decision-making transactor units be maintained in the basic accounts. The SNA does recognize, however, that the uses with which the MBS is concerned are important to many analysts, and it suggests that a supplementary table (Table 25 in the SNA) be drawn up to show central bank-like functions performed by entities other than the central bank and to allow for a consolidation of the central bank and other monetary institutions to form the equivalent of the MBS Monetary Survey. Although the ESA subsector for central banking authorities includes, in addition to the central bank, central monetary agencies of essentially public origin (for example, agencies managing foreign exchange, agencies whose function is to influence the bond market or money supply), which keep a complete set of accounts and enjoy autonomy of decision in relation to the central government, it concludes that most of the general government agencies engaged in monetary activities are not institutional units. The issue of currency by the state, its transactions with the Fund, and its management of portfolio investments designed to influence the money supply are therefore, in most cases, assigned in the ESA to the central government subsector.

Deposit Money Banks

In the SNA, the subsector of financial institutions called “other monetary institutions” is defined to include all banks except the central bank that have liabilities in the form of deposits payable on demand and transferable by check or otherwise usable in making deposits. The MBS defines an analogous subsector called “deposit money banks,” which differs slightly from the SNA grouping of “other monetary institutions” as a result of certain reroutings that are made. Although banks and similar institutions usually are the main issuers of deposit money, institutional arrangements may permit other financial transactors to incur transferable deposit liabilities that are generally recognized as means of payment. This is particularly true where governmental institutions incur such liabilities, notably through postal giro systems. The MBS regards such financial transactions as taking place in notionally separate financial units, which it consolidates with the deposit money bank accounts, and in this respect it differs from the SNA classification.13 In addition, when the treasury or some other governmental unit accepts transferable deposits from the general public, the deposits are classified in the MBS—but not in the SNA—in the deposit money bank accounts. Finally, central banks sometimes engage in commercial banking activities and play a major role in the creation of deposit money. Where separate accounts relating to such commercial banking activities are maintained, the MBS consolidates them with the accounts of the deposit money banks.

This paper draws extensively from a paper by Nancy D. Ruggles, “Financial Accounts and Balance Sheets: Issues for the Revision of the SNA” (unpublished; New Haven, Connecticut: Yale University, January 23, 1984). Questions relating to the delineation of other sectors will be covered in this paper only insofar as they affect the financial sector.

EUROSTAT, European System of Integrated Economic Accounts—ESA,2d ed. (Luxembourg, 1979).

The term MBS is used to reflect the current thinking of the Fund’s Bureau of Statistics on the development of a methodology for money and banking statistics.

The analogous sector in the ESA, “credit institutions,” consists of “all institutional units which are principally engaged in finance, i.e., which collect, transform, and distribute available funds. The main resources of these units consist of funds derived from liabilities incurred (sight and time deposits, cash certificates, bonds, etc.) and of interest received.”

The composition of the monetary authorities and deposit money banks is described in Section III.

These offshore banking units may have little influence on local financial conditions, and the practice of many countries is to consider them as nonresident. They are considered resident units in the MBS, however, in order not to create asymmetries in global foreign accounts data compiled by the Fund.

The treatment of the life insurance and pension funds subsector is covered in Chapter 30 of this volume.

There would be no conceptual problem, however, in splitting out a sub-sector in the SNA to match the MBS definition of other banking institutions.

It is the intention in the MBS, however, to adopt the same definition as that currently employed in the SNA and the ESA.

The problems of applying this approach during a period of financial change, and the fact that quantitative controls over a subset of banks may lead to distortions and innovation that ultimately render those controls ineffective, are beyond the scope of this paper.

Such reroutings are made in IFS for 48, 43, and 52 countries, respectively.

Also consolidated is the treasury’s position with the enhanced structural adjustment facility (ESAF). The ESAF has elements akin both to the use of Fund credit and to Trust Fund Loans.

The ESA treatment of postal giro systems is as follows. If the post office giro agencies are not institutional units, they remain part of the post office and are to be included with it in the sector for nonfinancial corporate and quasi-corporate enterprises. However, if the financial transactions relating to the giro service are carried out on behalf of the treasury or on behalf of an agency which, although not an institutional unit, is itself part of the treasury, these financial transactions are included only in the financial accounts of the subsector for central government, under the rule concerning transactions carried out on behalf of other units.

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