Abstract
Financial Sector Assessment Program-Technical Note-Systemic Risk Analysis
Data Gaps in the Nonbank, Non-Insurance Financial Sector46
Data gaps in the NBNI segment of the financial sector may hinder comprehensive monitoring and appraisal of risks. Major strides have been made, but a sizeable gap remains, and needs to be closed swiftly.
100. There are important data gaps confronting the measurement of certain segments of the NBNI financial sector. Specifically, a key gap is the other financial institutions (OFI) residual. The OFI residual is the difference between the total assets of the financial system and the assets held by all known subsectors (banks, insurance corporations and pension funds, financial vehicle corporations (FVCs), FCLs, investment funds, and MMFs). It includes financial institutions such as broker-dealers, venture capital funds, leasing and factoring companies, as well as special purpose vehicles not engaged in securitization (Table 20).
101. The euro area OFI residual is sizeable. In mid-2017, the residual accounted for €17 trillion, 22 percent of total financial system assets, 53 percent of the NBNI financial sector, and 153 percent of GDP (Figure 24). Data challenges arise owing to several factors. For example, national accounts statistics are based on residency, and therefore omit some cross-border activities, such as the operations of off-shore funds managed by euro area companies. Hence, OFI residual at the euro area level exceeds the aggregate of country-level OFI residuals. The latter benefit from supervisory and other non-public national data sources allowing more granular entity classification (see the 2017 ESRB Shadow Banking Monitor for further details).
102. These data gaps limit the comprehensive monitoring and assessment of risks associated with the euro area NBNI sector. Risks tend to center around entities engaged in credit intermediation, liquidity transformation or financial leverage. Even in cases where an entity does not partake in such activities, it may still be a part of a financial intermediation chain, for instance, if it creates leverage synthetically via derivatives or provides guarantees. However, in some countries, sector-specific risks may be lower because the residual includes many captive institutions such as holding companies or special purpose entities that raise funds to be used by their parents. These entities can be either within the supervisory perimeter (for example, as a financial institution within a holding structure) or they may facilitate intra-group transaction or fiscally-oriented operations by non-financial corporations.
103. In sum, although major strides have been made, the data gaps in the NBNI sector remain sizeable and should be closed expeditiously. A cross-country consistent and granular view of the entities populating the OFI sector would facilitate the tracking and appraisal of risks and thereby inform appropriate and customized policy responses that foster euro area financial stability.
Euro Area: Data Gaps in the Nonbank, Non-Insurance Financial Sector 1/
Citation: IMF Staff Country Reports 2018, 231; 10.5089/9781484369586.002.A005
Sources: ECB, and IMF staff calculations.1/ as of 2017Q2Euro Area: Data Gaps in the Nonbank, Non-Insurance Financial Sector 1/
Citation: IMF Staff Country Reports 2018, 231; 10.5089/9781484369586.002.A005
Sources: ECB, and IMF staff calculations.1/ as of 2017Q2Euro Area: Data Gaps in the Nonbank, Non-Insurance Financial Sector 1/
Citation: IMF Staff Country Reports 2018, 231; 10.5089/9781484369586.002.A005
Sources: ECB, and IMF staff calculations.1/ as of 2017Q2Euro Area: The Nonbank, Non-Insurance Financial Sector 1/
as of 2017Q2
Includes private equity and exchange-traded funds
Special purpose entities (SPEs) engaged in securitization
Includes leasing and factoring companies
Includes broker-dealers
Includes venture capital funds
Includes insurance and loan brokers, payment institutions
Include SPEs not engaged in securitization, holding companies
Euro Area: The Nonbank, Non-Insurance Financial Sector 1/
| Entity | Assets (Share of the total financial system assets, percent) |
||
|---|---|---|---|
| Nonbank, non-insurance financial sector | 41.3 | ||
| Investment funds | 16.9 | ||
| Money market funds (MMFs) | 1.5 | ||
| Investment funds | 15.4 | ||
| Bond funds | 4.6 | ||
| Equity funds | 4.1 | ||
| Mixed funds | 3.9 | ||
| Real estate funds | 0.9 | ||
| Hedge funds | 0.6 | ||
| Other funds 2/ | 1.3 | ||
| Other financial institutions (OFI) | 24.4 | ||
| Financial vehicle corporations (FVCs) 3/ | 2.4 | ||
| Financial corporations engaged in lending (FCLs) 4/ | 0.6 | ||
| OFI residual | 21.4 | ||
| Securities and derivative dealers (SDDs) 5/ | |||
| Specialist financial corporations (SFCs) 6/ | |||
| Financial auxiliaries 7/ | |||
| Captive-financial institutions and money lenders 8/ | |||
as of 2017Q2
Includes private equity and exchange-traded funds
Special purpose entities (SPEs) engaged in securitization
Includes leasing and factoring companies
Includes broker-dealers
Includes venture capital funds
Includes insurance and loan brokers, payment institutions
Include SPEs not engaged in securitization, holding companies
Euro Area: The Nonbank, Non-Insurance Financial Sector 1/
| Entity | Assets (Share of the total financial system assets, percent) |
||
|---|---|---|---|
| Nonbank, non-insurance financial sector | 41.3 | ||
| Investment funds | 16.9 | ||
| Money market funds (MMFs) | 1.5 | ||
| Investment funds | 15.4 | ||
| Bond funds | 4.6 | ||
| Equity funds | 4.1 | ||
| Mixed funds | 3.9 | ||
| Real estate funds | 0.9 | ||
| Hedge funds | 0.6 | ||
| Other funds 2/ | 1.3 | ||
| Other financial institutions (OFI) | 24.4 | ||
| Financial vehicle corporations (FVCs) 3/ | 2.4 | ||
| Financial corporations engaged in lending (FCLs) 4/ | 0.6 | ||
| OFI residual | 21.4 | ||
| Securities and derivative dealers (SDDs) 5/ | |||
| Specialist financial corporations (SFCs) 6/ | |||
| Financial auxiliaries 7/ | |||
| Captive-financial institutions and money lenders 8/ | |||
as of 2017Q2
Includes private equity and exchange-traded funds
Special purpose entities (SPEs) engaged in securitization
Includes leasing and factoring companies
Includes broker-dealers
Includes venture capital funds
Includes insurance and loan brokers, payment institutions
Include SPEs not engaged in securitization, holding companies
This chapter was prepared by Selim Elekdag, Tadeusz Galeza, and Sheheryar Malik, all Monetary and Capital Markets Department, IMF.
