Registering financial intermediation services on the national accounts as of 2005 : Financial intermediation services indirectly measured (FISIM) : nature, measurement and allocation : records in force until 2005 and changes to be introduced as of 2005

Abstract

Determining the output of services produced by financial intermediaries and how that output is allocated across the sectors and industries that have used them has been a longstanding problem for national accounting. The issue arises because the majority of these services are not charged or paid for explicitly. Instead, their cost is included in interest payments made and received by the intermediaries, either increasing the cost of lending by intermediaries, in the case of loans, or reducing the returns to investors, in the case of deposits. This means that the value of services of this kind has to be measured indirectly: hence their name of Financial Intermediation Services Indirectly Measured (FISIM). The main text of ESA 95 includes a very much simplified procedure for measuring the output of FISIM, which allocates them to a nominal sector and industry as a form of intermediate consumption. The fact that FISIM are not allocated to the end consumers of these services reduces total GDP. Therefore, in one of its annexes, ESA 95 includes the changes that would need to be made when an agreement is reached between the EU Member States on this allocation. At the end of 2002, after comparing various models, it was agreed what model would be applied as of January 2005 in order to calculate the production and distribution of FISIM. The results of the trial exercises performed to measure the impact of the new method on Spanish national accounts show an average increase in GDP over the period 1995-2001 of around 1.25%