La Bank of Italy has today published an informative guide on the main characteristics of the various statistics available on bank balance sheets. Intermediaries report a wide range of information to BankiItalia, which then disseminates it in aggregate form. Some statistics can be accessed directly by querying the Bank of Italy's Statistical Database (BDS) online. Other information, on the other hand, can only be consulted through synthetic indicators reported in the Bank's economic publications. The Bank's guide tries to put this information in order, to make the most of the information potential of the BDS and to read the published analyzes more consciously.
The individual bank balance sheet and the consolidated balance sheet
Banks and financial companies resident in Italy are required to draw up corporate financial statements (on an individual basis) and, if they are the head of a banking group, the consolidated one. To ensure uniformity and facilitate comparisons for statistical and supervisory purposes, Via Nazionale shares common schemes for preparation of the budget and defines all the recipients of the provisions (cf. Circular 262/2005).
Intermediaries prepare for each financial year the individual business balance sheet, consisting of the balance sheet, the income statement, the statement of comprehensive income, the statement of changes in equity, the cash flow statement, the explanatory notes and the related comparative information.
Il consolidated financial statements illustrates the equity and financial situation and the economic result of a group of companies considered as a single entity. It is drawn up by intermediaries, in compliance with international accounting standards and according to the provisions contained in circular 262/2005 of the Bank of Italy, when the conditions defined by Legislative Decree are met. 136/2015.
Intermediaries are therefore also required to draw up consolidated financial statements if they are the head of a banking or financial group that can be understood as a single economic entity made up of several legal entities.
Reports to the Bank of Italy
The Bank of Italy requires intermediaries to send information flows according to different formats in relation to the specific purposes of using the data.
There are two main reporting schemes with the related purposes of collection:
- the reporting of data necessary for the performance of monetary policy, payment system oversight and other tasks (statistical purposes);
- reports for supervisory purposes. The main differences between the two reporting schemes concern: the periodicity in sending the information, the intermediaries included in the reporting perimeter and the level of consolidation of the data transmitted, the geographical coverage, the classification of the counterparties, the recognition criteria of some instruments financial (e.g. for loans, the nominal value or book value may be requested).
The specificities of the two signage schemes reflect the twofold finality: contributing on the one hand to monetary policy assessments and on the other to safeguarding the stability of the banking and financial system. The flows associated with these purposes are included among the commitments deriving, respectively, from Italy's participation in the Eurosystem and in the Single Supervisory Mechanism (SSM).
Balance sheet data for statistical purposes
Via Nazionale collects monthly statistics on bank balance sheets from individual intermediaries, harmonized according to common criteria established within the Eurosystem, which it disseminates at an aggregate level through the monthly file Banks and money. The statistics are also used periodically in other Institute publications. They are also transmitted monthly by the Bank of Italy to the European Central Bank which uses them in the analysis to support the decisions monetary policy.
The information on harmonized bank balance sheets collected for statistical purposes aggregates the individual data of banks resident in Italy and considers the following components: end-of-period, monthly and annual stocks; flow data (trading of financial assets or issue and repayment of liabilities); growth rates. This information exclude both operations, including banking, carried out through branches and subsidiaries of banks based in Italy and operating abroad, and operations in Italy of the non-banking components.
The statistics on harmonized financial statements offer detailed information on the characteristics of bank customers and the duration of financial instruments, also providing relevant information for analysis of riskiness of the credit market.
Financial statement data for supervisory purposes
Like reports for statistical purposes, the Bank of Italy receives periodic reports for the purpose ofsupervisory activity. Banks and other financial intermediaries subject to supervision provide information both at an individual level and, in the case they are heads of banking or financial groups, at a consolidated level according to accounting and prudential reporting formats. These reports contribute to verifying compliance with prudential supervisory provisions, analyzing the evolution of intermediary management and assessing the stability of the banking system as a whole.
Reports for supervisory purposes are organized according to the composition of various reporting schemes. The European scheme, elaborated by the European Banking Authority (EBA), establishes a common approach to the collection of data from the European banking sector, supplemented by information requested on a national basis with reporting frequency, detail and aggregation criteria different from the European one.
The reports of the European scheme reflect, for example, the degree of sustainability of the operating models of the banks and the nature of the risks to which they are exposed, thus contributing to the identification of the topics to be investigated in the supervisory activity. While the reports for statistical purposes are monthly, the data for purposes of prudential supervision relating to the European reporting scheme are quarterly, half-yearly or annually and for some reporting items they follow different evaluation criteria.
Data on bank balance sheets: availability and purpose of use
Some information collected for statistical purposes, in particular that deriving from aggregate bank balance sheets starting from individual reports, can be consulted by means of an online query of the BDS o they can be taken from the monthly issue Banks and money: national series. The specific information regarding the supervisory purposes, deriving from the reports on the individual and consolidated financial statements, are instead not directly available to users except in graphic form or through banking indicators in the main economic publications or in the tables of the relative appendices.
As part of the analyzes conducted by the Bank of Italy, the characteristics described guide the choice of the type of bank data to be used on the basis of the information needs or the economic phenomena to be represented.
Statistical bank data on an individual basis offer a set of relevant information for the development of cyclical and structural analyzes of the Italian economy. The data presents useful details on the characteristics of both banking customers (institutional sector, branch of economic activity, territorial location) and of the different types of banking operation (deposits in various forms, loans in various uses, i.e. loans for the purchase of homes, consumer credit, other mortgages).
Compared to the results that can be deduced from the aggregated individual financial statements, the consolidated financial statements data offer a informative content which can be different. These, in fact, offer a complete view of the banking group, observed as a single corporate entity, while the individual banking statistics allow you to monitor the strengths and weaknesses of the intermediaries that belong to it. The analyzes on the capital solidity of the credit system as a whole are mainly based on consolidated data, which help to provide useful indicators for a correct identification of the major risk factors for financial stability.
