Methodological Notes

Notes

Symbols and Conventions

– Category not applicable

0,0 Magnitude less than indicated measurement units

... Data not available, although the phenomenon existed

x Indicator is not calculated in such expression

Abbreviations
ECB European Central Bank
EU European Union
ESA 2010 The European System of National and Regional Accounts 2010
LB The Bank of Lithuania
MFI Monetary financial institutions
MMF Money market funds
SDR Special Drawing Rights
IMF International Monetary Fund

2. Monetary Financial Institutions Balance Sheet and Monetary Statistics

The chapter provides data on the MFIs of Lithuania. The data on the balance sheet of MFIs of Lithuania is collected from commercial banks of Lithuania and foreign bank branches in accordance with the Bank of Lithuania Resolution No 03–27 of 13 February 2014 on the Balance Sheet Statistical Reporting of the Monetary Financial Institutions and the data of the Bank of Lithuania accounting documents. This data is grossed up to cover 100 per cent of the total balance of all the credit institutions including the Lithuanian Central Credit Union and other credit unions.

The data complies with the ECB requirements laid out in Regulation (EU) No 1071/2013 concerning the balance sheet of the monetary financial institutions sector (recast) (ECB/2013/33), as corrected. The data is classified into categories on the basis of the requirements of this Regulation, which are consistent with the classification principles laid down in ESA 2010.

The main categories of the assets in the balance sheet are the following:
- cash — domestic and foreign banknotes and coins in circulation, which are commonly used to make payments held by MFI;
- loans — holdings of financial assets created when creditors lend funds to debtors, which are not evidenced by documents or are evidenced by non-negotiable documents. This category also includes assets of MFI in the form of deposits;
- holdings of debt securities — bonds, notes, certificates and similar negotiable financial instruments serving as evidence of debt, which are usually traded on the secondary markets or can be offset on the market; they do not grant to the holder any ownership rights over the institution issuing them. The category also includes subordinated debt in the form of securities;
- MMF units (shares) — close substitute for deposits in terms of liquidity. These are units (shares) of such collective investment undertakings which comply with all the criteria specified in Article 2 of Regulation (EU) No 1071/2013;
- investment fund units (shares) — units (shares) issued by non-MMF investment funds, which are collective investment undertakings that invest in financial and/or non-financial assets, to the extent that the objective is investing capital raised from the public;
- equity — property rights on corporations or quasi-corporations; it is a claim on residual value after the claims of all creditors have been met, i.e., listed shares and unlisted shares and other equity.

 The main categories of the liabilities in the balance sheet are the following:
- currency in circulation — banknotes and coins in circulation issued by the ECB and the Eurosystem NCBs that are commonly used to make payments. This category does not include collectors (commemorative) coins issued at a price above their face value;
- deposits — amounts owed to creditors without issuing negotiable securities or MMF units (shares). This category also includes MFI liabilities in the form of loans;
- overnight deposits — deposits in both national and foreign currencies which are convertible into currency or may be transferred against a cheque, banker’s order, debit entry, etc. on demand, without delay, restriction or fine. This subcategory also includes non-transferable deposits that are convertible on demand or by close of business the following working day without any significant penalty or restriction, balances on prepaid cards, loans to be repaid by close of business the following working day;
- deposits with agreed maturity — non-transferable deposits which may not be converted into currency prior to the agreed fixed term or which may be converted into currency prior to that agreed term, although in that case a fine of a particular type shall be levied on the depositor;
- deposits redeemable at notice — non-transferable deposits without agreed maturity that may not be converted into currency without a period of prior notice, until the expiration of which these deposits may not be converted into currency, or may be converted upon payment of a fine;
- repurchase agreement — an arrangement to sell securities and to repurchase the same or similar securities at a specified price on a predetermined future date. Such agreements are similar to collateralised loans secured by a pledge of securities, although it differs in that the seller does not retain legal ownership of the assets. These repo-type operations are classified under this item: bond lending against cash collateral and sale/buy-back agreement. The securities underlying repo type operations are recorded following the rules in asset item “holdings of debt securities”. Operations involving the temporary transfer of gold against cash collateral are also included under this item;
- MMF units (shares) — units (shares) issued by MMFs, as defined in Article 2 of Regulation (EU) No 1071/2013;
- debt securities issued — securities other than equity (bonds, notes, certificates and similar) issued by the MFI, which are usually negotiable and traded on the secondary markets or which can be offset on the market; they do not grant the holder any ownership rights over the issuer. This category also comprises the issued subordinated debt in the form of securities;
- capital and reserves — this category comprises the amounts arising from the issue of equity capital by reporting agents to shareholders or other proprietors, representing for the holder property rights in the MFI and generally an entitlement to a share in its profits and to a share in its own funds in the event of liquidation. Profit (or loss), as recorded in the statement of profit and loss, the funds whose resource are undistributed profit or funds set aside by MFIs in anticipation of likely future payments or obligations are also included. In detail, the category would in principle include: equity capital raised, including the share premium, profit/loss as recorded in the statement of profit and loss, income and expenses recognised directly in equity, funds arising from income not distributed to the shareholders, specific and general provisions for loans, securities and other assets. This definition is used only for statistical purposes.

Sectoral classification is based on the principles of the ESA 2010 classification of institutional units by institutional sectors and subsectors. Their detailed description is provided in the ECB publication “Monetary Financial Institutions and Markets Statistics Sector Manual — Guidance for the Statistical Classification of Customers”. All positions with residents of other euro area countries, including the ECB, are classified as domestic positions as of 1 January 2015, when Lithuania joined the euro area. The concept “residents” in this chapter means residents of the euro area.

The table shows sectors or groups thereof, as well as their compliance with the ESA 2010 institutional sectors and subsectors.

 

ESA 2010 sectors

Euro area resident sector

Money-issuing sector

MFIs

Central bank

S.121

Other MFIs

Deposit-taking corporations except the central bank

S.122

 

MMFs

S.123

Money-neutral sector

Non-MFIs

Central government

S.1311

Money-holding sector

Other government

State government

S.1312

Local government

S.1313

Social security funds

S.1314

Other resident sectors

Financial corporations except MFIs

Investment funds

S.124

 

 

Other financial intermediaries

S.125+S.126+S.127

 

 

Insurance corporations

S.128

 

 

Pension funds

S.129

 

Non-financial corporations and households including non-profit institutions serving households

Non-financial corporations

S.11

 

Households including non-profit institutions serving households

S.14 + S.15

Non-resident

sector

MFIs (banks)

S.2

Non-MFIs

(non-banks)

General government

Other sectors

 

Resident sector:
- MFIs — financial institutions, which together form the money-issuing sector. They are defined in Article 1 of Regulation (EU) No 1071/2013. In Lithuania, apart from the Bank of Lithuania, these include commercial banks, foreign bank branches, the Lithuanian Central Credit Union, other credit unions and money market funds (as defined in Article 2 of Regulation (EU) No 1071/2013). A list of Lithuanian MFIs for statistical purposes is published on the Bank of Lithuania website. Lithuanian MFIs are also included in the list of MFIs of the EU countries, which has been compiled for statistical purposes. This list is published on the ECB website;
- central government — the general government, as defined by ESA 2010 (paragraphs 2.111 to 2.113), other than state and local government and social security funds. It includes all the administrative departments of the State and other central agencies whose competence extends normally over the whole economic territory, except for the administration of social security funds;
- state government — those types of public administration that are separate institutional units exercising some of the functions of government, except for the administration of social security funds, at a level below that of central government and above that of the governmental institutional units existing at the local level (ESA 2010, paragraph 2.115);
- local government, as defined in ESA 2010, includes those types of public administration the competence of which extends to only a local part of the economic territory, apart from local agencies of social security funds (ESA 2010, paragraph 2.116);
- social security funds — all central, state and local institutional units the principal activity of which is to provide social benefits and which fulfil each of the following two criteria: a) by law or by regulation certain groups of the population are obliged to participate in the scheme or to pay contributions; b) general government is responsible for the management of the institution in respect to the settlement or approval of the contributions and benefits independently from its role as supervisory body or employer (ESA 2010, paragraph 2.117). In Lithuania these are State Social Insurance Fund Board under the Ministry of Social Security and Labour and branches thereof, State Patient Fund under the Ministry of Health and territorial patient funds;
- investment funds — investment funds as defined in Regulation (EU) No 1073/2013 (ECB/2013/38);
- other financial intermediaries — all financial corporations and quasi-corporations that are principally engaged in financial intermediation (except for MFIs, investment funds, insurance corporations and pension funds), i.e. engaged in borrowing, transforming and onlending funds on their own account (subsector S.125, ESA 2010, paragraphs 2.86 to 2.94). Entities that are principally engaged in facilitating financial intermediation, but which are not financial intermediaries themselves (S.126, ESA 2010, paragraphs 2.95 to 2.97), and the captive financial institutions and money lenders (S.127, ESA 2010, paragraphs 2.98 to 2.99) in the MFIs balance sheet and monetary statistics, are also included under the subcategory Other Financial Intermediaries. Beginning with January 2015 data, this subcategory includes banks and credit unions with revoked licenses. Until December 2014, such credit institutions were included under the category Non-financial Corporations;
- insurance corporations — financial corporations and quasi-corporations that are principally engaged in financial intermediation as the consequence of the pooling of risk mainly in the form of direct insurance or reinsurance. This category comprises both life and non-life insurance activities (S.128, ESA 2010, paragraphs 2.100 to 2.104);
- pension funds — all financial corporations and quasi-corporations that are principally engaged in financial intermediation as the consequence of the pooling of social risks and needs of the insured persons (social insurance) (S.129, ESA 2010, paragraphs 2.105 to 2.110);
- non-financial corporations — institutional units that are independent legal entities and market producers, and whose principal activity is production of goods and provision of non-financial services (S.11, ESA 2010, paragraphs 2.45 to 2.54);
- households and non-profit institutions serving households — the households sector S.14 consists of individuals or groups of individuals as: 1) consumers, 2) producers of goods and non-financial services exclusively for their own final use and 3) entrepreneurs producing market goods and non-financial and financial services (market producers) (such as sole proprietorships, farmers, businessmen working with a business certificate, etc. which usually use own labour and financial resources) (ESA 2010, paragraphs 2.118 to 2.128). The sector of non-profit institutions serving households S.15 consists of separate legal institutional units, which serve particular groups of households, whose principal resources are derived, for instance, from voluntary contributions, from payments made by general governments and from property income (trade unions, political parties, churches and religious societies, charities, etc.) (ESA 2010, paragraphs 2.129 to 2.130).

Non-resident sector:
- MFIs (banks) — MFIs residing in the EU Member States the currency of which is not the euro and institutions residing outside the EU, similar to MFIs. Definition of a group Banks basically corresponds to that of a group MFIs, which comprise the subsector of the Central Bank and the subsector Deposit-Taking Corporations, except for the central bank as defined by ESA 2010. The group Banks, as of April 2007, includes also international organisations that undertake banking activities as central monetary authorities, excluding the ECB;
- general government — central, state and local government and social security funds, as defined in the euro area resident sector as defined in ESA 2010. This category also includes most (even those located in Lithuania or elsewhere in the euro area) international and supranational organisations excluding the ECB and international organisations attributed to groups of banks and other financial intermediaries;
- other sectors — investment funds and other financial intermediaries, insurance corporations and pension funds, non-financial corporations, households and non-profit institutions serving households, as defined in the euro area resident sector. Non-resident other financial intermediaries, as of April 2007, include international financial organisations if their activities have the features of a development bank.

The euro area encompasses those Member States in which the euro has been adopted as the single currency. The euro area currently comprises Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain (as from 1 January 1999), Greece (as from 1 January 2001), Slovenia (as from 1 January 2007), Cyprus and Malta (as from 1 January 2008), Slovakia (as from 1 January 2009), Estonia (as from 1 January 2011), Latvia (as from 1 January 2014), Lithuania (as from 1 January 2015). For the purposes of monetary statistics, the euro area also includes the ECB.

Without prejudice to prevailing accounting and netting practices, for monetary statistics purposes all financial assets and all financial liabilities are reported on a gross basis. Reported nominal value of loans and deposits excludes accrued interest. Accrued interest on securities held or issued is not included in the value of related securities.

Asset and liability items denominated in foreign currencies are converted into euro on the basis of euro foreign exchange reference rates formed in accordance to the Law on Accounting announced by the Bank of Lithuania at the end of the reporting period. The data of the Bank of Lithuania accounting documents denominated in foreign currencies are converted into euro on the basis of Euro foreign exchange reference rates announced by the ECB.

Seasonal adjustments are not used.

Three kinds of information are provided: outstanding amounts at the end of period, transactions during the period and annual growth rates. Transactions during the period are calculated indirectly, i.e. by subtracting other changes (not arising from transactions) from differences in outstanding amounts. Annual growth rates are calculated from the index of adjusted outstanding amounts.

The transactions Ft in month t are calculated from differences in outstanding amounts adjusted for reclassifications, other revaluations, exchange rate variations, write-offs/write-downs of loans, and securities revaluation due to price fluctuations:

n25073/formule1.gif

where:
Lt — the outstanding amount at the end of month t;
Ct — change arising from reclassification and other adjustment;
Et — change arising from exchange rate movements;
Vt — change arising from write-offs/write-downs of loans, and securities revaluation due to price fluctuations.

Data on reclassification and other adjustment (Ct) and revaluation adjustments (Vt) are collected from reporting agents, while changes arising from exchange rate variations (Et) are estimated by the Bank of Lithuania.

The annual growth rate at for month t is calculated in the following way:

n25073/formule2.gif

Where the index of adjusted outstanding amounts It  at the end of month t is defined in the following way:

n25073/formule3.gif

and where:
Ft — transactions during month t;
Lt-1 — outstanding amount at the end of the month t–1.
Data published for the first time are preliminary and are usually revised during a month. Data can also be revised as from March 2004.

Subsection 2.1
Table 2.1.2
Currency in circulation — comprises the Bank of Lithuania share of euro banknotes issued in the Eurosystem and euro coins issued by the Bank of Lithuania. The total value of banknotes in circulation is assigned to central banks participating in the Eurosystem, according to the banknotes allocation key defined in the Decision of the European Central Bank of 29 August 2013 on the issue of euro banknotes (ECB/2013/27), as amended. Up until December 2015 this includes notes and coins denominated in litas, not yet withdrawn from circulation. External liabilities outside of the euro area include the counterpart to IMF SDR, allocated to the Republic of Lithuania.

Subsection 2.2
The data on the aggregated balance sheet of Lithuanian other MFIs, i.e. institutions attributed to the MFI sector (excluding the Bank of Lithuania), which also include inter-MFI asset and liability positions, are presented in this subsection.
Tables 2.1.1, 2.2.1
Loans to euro area residents also comprise deposits in other MFIs or financial institutions.

Subsection 2.3
The consolidated balance sheet of all Lithuanian MFI data, in which inter-MFI asset and liability positions within the euro area have been eliminated — amounts of the corresponding MFIs balance sheet items in the asset side have been subtracted from the MFI balance sheet liabilities — are presented in this subsection.

Subsection 2.4
The contribution of Lithuania to the euro area monetary aggregates and counterparts are calculated from the contribution of Lithuania to the consolidated balance sheet of the euro area MFIs. They also include some of monetary liabilities of the central government of Lithuania although debt securities with a maturity of up to 2 years held by the MFIs of Lithuania shall be excluded.
Tables 2.1.3–2.9.1
Loans to non-residents also include deposits in other MFIs (banks) or financial institutions.

Subsection 2.9
The EU non-euro area (excluding Lithuania) — the economic territory of the EU, excluding the euro area and Lithuania. As of 1 May 2004 it also encompasses Cyprus (until 1 January 2008), Czech Republic, Estonia (until 1 January 2011), Hungary, Latvia (until 1 January 2014), Malta (until 1 January 2008), Poland, Slovakia (until 1 January 2009), Slovenia (until 1 January 2007), as of 1 January 2007 — Bulgaria and Romania, as of 1 July 2013 — Croatia.

Updated 20/03/2015