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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.
6.2 To summarize the guidance in Chapters 2 and 3:
The definition of deposit-takers is provided in Chapter 2 (paragraphs 2.4 to 2.12)
Transactions and positions should be recorded on an accrual basis, and only existing
actual assets and liabilities should be 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 the
preferred basis of valuation of transactions, as well as 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
realistic assessment of value than the application of fair value (see paragraphs 3.20 to
Residence is defined in terms of where an institutional unit has its center of economic
interest (see paragraphs 3.34 to 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 3.49 to 3.50). Duration is also defined
(see paragraphs 3.51 to 3.56).
6.3 Except where otherwise noted, these are the concepts to be employed in compiling
the underlying series used to calculate FSIs.
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6.4 The underlying series to be used in calculatin