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DRAFT: March 2003
Specification of Financial Soundness Indicators
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DRAFT: March 2003
Specification of Financial Soundness Indicators for Deposit-Takers
6.1 This chapter brings together the concepts and definitions set out in Part I of the Guide
to explain how FSIs for deposit-takers are to be calculated. The next two chapters cover the
calculation of FSIs for other sectors and for financial market FSIs, respectively. The final
chapter in Part II covers real estate price indices. The indicators set out in these chapters are
those that the IMF’s Executive Board determined to be core and encouraged FSIs at its
meeting in June 2001.
6.2 Guidance on the accounting principles for use in compiling the underlying series
required for each FSI are set out in Chapters 2, 3, and 4. In summary:
The definition of deposit-takers is provided in Chapter 2 ( paragraph 2.4 to 2.10)
Transactions and positions should be recorded on an accrual basis of accounting, and
only existing actual assets and liabilities recognized (paragraphs 3.3 to 3.9).
The Guide prefers valuation methods that can provide the most realistic assessment
at any moment in time of the value of an instrument or item. Market value is to be the
basis of valuation of transactions, and for positions in traded securities. For positions
in nontradable instruments, the Guide acknowledges that nominal value (supported by
appropriate provisioning policies) may provide a more reliable measure of value than
the application of fair value (see paragraphs 3.20 to 3.33).
Residence is defined in terms of where an institutional unit has a center of economic
interest (see paragraphs 3.35-3.36).
Transactions and positions in foreign currency should be converted into a single unit
of account based on the market rate of exchange (see paragraphs 3.44 to 3.48).
Short-term maturity is defined as one year or less (or payable on demand), with over
one year defined as long-term (see paragraphs