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FINANCIAL DERIVATIVES

Statistics Directorate    
French Equivalent: Sociétés financières

Definition:
Financial derivatives are financial instruments that are linked to a specific financial instrument or indicator or commodity, and through which specific financial risks can be traded in financial markets in their own right; their value derives from the price of the underlying item (i.e. the reference price) and, unlike debt instruments, no principal amount is advanced to be repaid and no investment income accrues.

Context:
In accordance with the 2000 revision of the fifth edition of the IMF’s Balance of Payments Manual (BPM5), income from financial derivatives (such as interest rate swaps) is no longer considered to be Income on Debt (Interest) in the balance of payments.

OECD & IMF, 2004, Glossary of Foreign Direct Investment Terms and Definitions, Paris and Washington DC.

Source Publication:
SNA 11.34 [(AF) – Annex to chapter XIII].

Hyperlink:
http://esa.un.org/unsd/sna1993/introduction.asp

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Thursday, November 04, 2004