Discrepancy between Financial
Accounts and Capital Accounts
Working Party on Financial Statistics
OECD
Paris, France
October 14, 2008
Susan Hume McIntosh
Sr. Economist and Special Project Coordinator
Federal Reserve Board
Washington, DC 20551
smcIntosh@frb.gov
1
Organizational Structure in the
United States

U.S. has decentralized statistical system

BEA - current and capital accounts, BOP

FRB - financial accounts, balance sheets

Both NIPA and FFA have discrepancies

Jointly produce integrated macroeconomic
accounts
2

Two versions of net lending/borrowing
Discrepancies in the Financial
Accounts

Discrepancies for most sectors

Discrepancies for a few instruments

Due to different data sources, NIPA
discrepancy, timing of recorded transactions

Point out errors and poor estimates for
missing data

3
Keep internal consistency of accounts since
sector discrep. = instrument discrep.
Sector Discrepancies
4
Instrument Discrepancies
5
Total Sector/Instrument
Discrepancy
6
Total Discrepancy as a Percent of
Total Financial Assets
7
Integrated Macroeconomic
Accounts for the United States
8

Produce integrated accounts based on NIPA, ITA, and
FFA.

Published on BEA’s website for 1960-2007 annually

Structure based on guidelines in the System of National
Accounts 1993

Seven sector tables

Ongoing program to improve integration of NIPAs and FFA
What are Integrated Accounts?

Complete sequence of accounts:
–
–
–
–
–
–
9
Current (production and income).
Capital accumulation.
Financial accumulation.
Other changes in volume.
Revaluation.
Balance sheet.
Progression of Accounts
7. Capital
1. Balance sheet
position
gains
(revaluations)
6. Other
changes
in volume
2. Production
(current account)
3. Income &
saving
(current account)
5. Lending and
borrowing
(capital account)
10
4. Capital
accumulation
Net Lending/Borrowing
11

Capital Account: net saving from the current
account less fixed investment

Financial Account: net acquisition of financial
assets less net increase of financial liabilities

Use capital account version in sequence of
accounts

Discrepancy between two versions shown in
“other changes in volume”
Net Lending/Borrowing
12
Difference between Capital Account and
Financial Account Net Lending/Borrowing
13
Where Are We Headed?
14

Both agencies have projects underway that
would hopefully narrow the differences

Improvements related to sharing knowledge
about source data and improving timing of
transactions

Ongoing discussions of how new developments
in the economy would be reflected in accounts

Still many challenges due to limited source data
for some sectors