National%20Balance%20Sheet%20Accounts%20in%20Israel%20Methods%20and%20Uses - PowerPoint PPT Presentation

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National%20Balance%20Sheet%20Accounts%20in%20Israel%20Methods%20and%20Uses

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The national balance sheet accounts for Israel were first published in 2002 for the year 1995. ... Households balance sheets of other sectors and information ... – PowerPoint PPT presentation

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Title: National%20Balance%20Sheet%20Accounts%20in%20Israel%20Methods%20and%20Uses


1
National Balance Sheet Accounts in IsraelMethods
and Uses
2
Contents
  • Introduction
  • Sources and Methods
  • Co-operation with the financial stability unit at
    the Bank of Israel
  • Uses of the balance sheets
  • Main findings of latest balance sheet

3
Introduction
  • The national balance sheet accounts for Israel
    were first published in 2002 for the year 1995.
  • Since then the balance sheets have been prepared
    for the years 2001 to 2004 (presently completing
    2005-2006).
  • Over the years changes in number of sub sectors
    and types of instruments have been introduced.

4
Sources and Methods
  • The value of asset/liability derived from
  • - method related to an institutional
  • sector
  • - distribution of the total value of
  • an asset/liability among various
  • sectors.

5
Sources and Methods
  • First phase assets and liabilities are recorded
    in accordance with the data in each sectors
    financial statements.
  • Second phase comparison between the sums of
    assets and the corresponding liabilities.
    Choosing the most reliable estimate.
  • Third phase if no information is available we
    use the counterpart method or the residual
    derivation method.

6
Sources and Methods
  • Non Financial Corporations, Other Financial
    Intermediaries and Financial Auxiliaries based
    on the analysis of the balance sheets of the
    corporations.
  • Households balance sheets of other sectors and
    information about specific assets known for the
    households (deposits and loans).

7
Sources and Methods
  • Deposit Money Corporations the main source is
    the Central Bank, Supervisor of banks, and some
    details are collected directly from the large
    banks.
  • Pension and Provident Funds and Insurance
    Corporations the source is the report of
    Capital Market of the Insurance and Saving
    division of the Ministry of Finance.

8
Sources and Methods
  • Central Government the source is the Ministry
    of Finance, Office of the Accountant General.
  • NPISH and GNPI survey of balance sheets for
    public and private NPI conducted by the CBS.

9
Sources and Methods
  • The Tel Aviv Stock Exchange is the source for the
    market values of the quoted governmental bonds,
    quoted private bonds and shares.
  • The source for the non financial assets is the
    net capital stock calculated in the NA using the
    PIM method (doesnt include land).

10
Co-operation with the financial stability unit at
the Bank of Israel
  • Has led to changes in balance sheets
  • Separation of the Holding Companies from the
    Other Financial Intermediaries.
  • Division between foreign currency indexed assets
    and CPI indexed assets used to sum up all
    assets linked or denominated in foreign currency
    (to analyze the economys resilience to exchange
    rate risk).

11
Co-operation with the financial stability unit at
the Bank of Israel
  • Breakdown of assets and liabilities
  • by maturity (to analyze liquidity risks).
  • Compilation of up-to-date quarterly national
    balance sheets (still under development).

12
Uses of the balance sheets
  • Paper which presents a framework for analyzing an
    economys resilience to exchange rate risk using
    the balance sheet approach.
  • This analysis shows that Israels economy was
    highly vulnerable to a depreciation of the shekel
    in 1997, but from then until 2005 it became more
    resilient. (written by Yair Haim and Roee Levy of
    the Bank of Israel).

13
Uses of the balance sheets
  • Distribution of credit by all the lender and
    borrower sectors and by type of financial
    instrument last data available is for 2004.
  • Based on the latest complete balance sheet a
    similar but partial matrix is prepared by the
    Central Bank to have an up-to-date preliminary
    set of data last matrix available at present is
    for the first quarter of 2008.

14
Uses of the balance sheets
  • The financial stability unit also uses the
    balance sheets and other data as basic input for
    calculating financial soundness indicators.

15
Main findings - 2004
  • Israels total national wealth NIS 1,166
    billion, which is 2.06 times GDP.
  • The total assets NIS 5,139 billion, which is
    9.1 times GDP.
  • The government debt (mainly bonds) NIS 564
    billion.

16
Main findings - 2004
  • The total credit NIS 1,388 billion.
  • The loans from the banks 44 of the total
    credit. Were mainly given to Non-Financial
    Corporations (50) and the households (38).
  • Total credit to Non-Financial Corporations -
    NIS 428 billion
  • Total credit to the Households NIS 241
    billion.

17
Distribution of assets - 2004
18
Distribution of liabilities - 2004
19
Ratio of financial assets to non-financial assets
20
Conclusion
  • The balance sheets were first developed within
    the NA.
  • The collaboration with the Central Bank has
    proved fruitful and has lead to wider use of the
    balance sheets, mainly for analysis of financial
    soundness.
  • The ongoing development of the balance sheets
    will make further uses possible in the future.
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