Source
Source Contact person/organisation Contact person/organisationIn this dataset, almost all OECD countries compile their data according to 2008 System of National Account (SNA).
The link to the file "ANA_changes.xls" is available for users to provide more information on where OECD countries and non member countries stand regarding the change over the 2008 SNA.
The readers' guide gives general information on the dataset and withheld criteria for this dataset.
Data Characteristics Data Characteristics Other data characteristics Other data characteristicsNet lending/borrowing is one of only two balancing items in the SNA where the reference to "net" is not in juxtaposition to "gross": in other words, it is not in reference to lending net of depreciation. If it is positive it is described as net lending and if negative, as net borrowing. It reflects the amount of financial assets that are available for lending or needed for borrowing to finance all expenditures - consumption expenditure, gross capital formation and capital transfers - in excess of disposable income. Its importance as an economic concept is best illustrated by the fact that net lending/net borrowing of general government forms one of the two Maastricht excessive deficit criteria (with an additional adjustment to reflect net streams of interest payments resulting from swaps arrangements and forward rate agreements) used by the European Commission to assess the soundness and sustainability of public finances.
Concepts & Classifications Concepts & Classifications Key statistical concept Key statistical conceptDefinition
Net lending or borrowing can be measured identically as the balancing item in either the capital or financial accounts. It can therefore be derived as saving minus the value of acquisitions less disposals of non-financial assets plus capital transfers receivable minus capital transfers payable. Or it can be derived as the difference between net acquisition of financial assets and net incurrence of liabilities. Financial assets (and liabilities) include: Monetary gold and special drawing rights, Currency and deposits, Debt securities, Loans, Equity and investment fund shares/units, Insurance, pension and standardised guarantee schemes (including pension entitlements, see B8NS14_S15SB6NS14, Net household saving), Financial derivatives and employee stock options and other accounts receivable and payable (such as trade credits and advances for work in progress or to be undertaken).
Other manipulations Other manipulationsAlthough it can be derived via either approach it is important to note that, in practice, achieving this equivalence is one of the most difficult tasks in compiling national accounts.
Another important point worth making in this context concerns contingencies. Many types of contractual financial arrangements do not give rise to unconditional requirements either to make payments or to provide other objects of value. These "contingencies" are not recorded as financial assets in the SNA. If an event occurs (and a feature of contingencies is that they may not), for example, transactions in financial assets related to the realisation of the contingency, the transactions are recorded in the accounts in the usual way. A simple example of a contingency is an overdraft facility on a bank account. The existence of the facility does not of itself create a financial asset (of the bank) and liability (of the account holder). But any borrowing that subsequently occurs in relation to the facility will.
Other Aspects Other Aspects Recommended uses and limitations Recommended uses and limitationsComparability
Generally the comparability of statistics on net lending and net borrowing is good, especially for EU countries. That said, the difficulty that many countries face in reconciling the two approaches to measurement gives some indication of the care needed. Comparability, or rather the care needed when interpreting cross-country data, is perhaps a bigger issue at the sectorial level. Again, this is not fundamentally a question of conceptual differences but real differences in the types of institutions included within institutional sectors: for example in some countries hospitals are outside of the general government sector - see also Section 28.
In Germany, in 1995, after unification, the ownership of the economic units in the former German Democratic Republic (GDR) was given to a newly created public entity called 'Deutsche Treuhand'. This entity was unwound in 1995 and the German Federal Government had to assume its debt. In National Accounts this amount was treated as a capital transfer from General government sector (S13) to Non-financial corporations (S11).
In this dataset, almost all OECD countries compile their data according to 2008 System of National Account (SNA).
The link to the file "ANA_changes.xls" is available for users to provide more information on where OECD countries and non member countries stand regarding the change over the 2008 SNA.
The readers' guide gives general information on the dataset and withheld criteria for this dataset.
Net lending/borrowing is one of only two balancing items in the SNA where the reference to "net" is not in juxtaposition to "gross": in other words, it is not in reference to lending net of depreciation. If it is positive it is described as net lending and if negative, as net borrowing. It reflects the amount of financial assets that are available for lending or needed for borrowing to finance all expenditures - consumption expenditure, gross capital formation and capital transfers - in excess of disposable income. Its importance as an economic concept is best illustrated by the fact that net lending/net borrowing of general government forms one of the two Maastricht excessive deficit criteria (with an additional adjustment to reflect net streams of interest payments resulting from swaps arrangements and forward rate agreements) used by the European Commission to assess the soundness and sustainability of public finances.
Definition
Net lending or borrowing can be measured identically as the balancing item in either the capital or financial accounts. It can therefore be derived as saving minus the value of acquisitions less disposals of non-financial assets plus capital transfers receivable minus capital transfers payable. Or it can be derived as the difference between net acquisition of financial assets and net incurrence of liabilities. Financial assets (and liabilities) include: Monetary gold and special drawing rights, Currency and deposits, Debt securities, Loans, Equity and investment fund shares/units, Insurance, pension and standardised guarantee schemes (including pension entitlements, see B8NS14_S15SB6NS14, Net household saving), Financial derivatives and employee stock options and other accounts receivable and payable (such as trade credits and advances for work in progress or to be undertaken).
Although it can be derived via either approach it is important to note that, in practice, achieving this equivalence is one of the most difficult tasks in compiling national accounts.
Another important point worth making in this context concerns contingencies. Many types of contractual financial arrangements do not give rise to unconditional requirements either to make payments or to provide other objects of value. These "contingencies" are not recorded as financial assets in the SNA. If an event occurs (and a feature of contingencies is that they may not), for example, transactions in financial assets related to the realisation of the contingency, the transactions are recorded in the accounts in the usual way. A simple example of a contingency is an overdraft facility on a bank account. The existence of the facility does not of itself create a financial asset (of the bank) and liability (of the account holder). But any borrowing that subsequently occurs in relation to the facility will.
Comparability
Generally the comparability of statistics on net lending and net borrowing is good, especially for EU countries. That said, the difficulty that many countries face in reconciling the two approaches to measurement gives some indication of the care needed. Comparability, or rather the care needed when interpreting cross-country data, is perhaps a bigger issue at the sectorial level. Again, this is not fundamentally a question of conceptual differences but real differences in the types of institutions included within institutional sectors: for example in some countries hospitals are outside of the general government sector - see also Section 28.
In Germany, in 1995, after unification, the ownership of the economic units in the former German Democratic Republic (GDR) was given to a newly created public entity called 'Deutsche Treuhand'. This entity was unwound in 1995 and the German Federal Government had to assume its debt. In National Accounts this amount was treated as a capital transfer from General government sector (S13) to Non-financial corporations (S11).