NATIONAL AND SECTOR BALANCE SHEETS IN THE UNITED KINGDOM

Although national and sector balance sheets have long been regarded as part of the national accounting framework, for a variety of reasons their compilation by official statisticians has been the exception rather than the rule. A programme of balance sheet work in the United Kingdom Central Statistical Office has recently been completed and the results published. The theoretical and practical problems arising in the course of this work are described and discussed. Summary results are given together with an interpretation of the main changes in the sectoral composition of national wealth between 1957 and 1975.     

NATIONAL AND SECTOR BALANCE SHEETS IN CONCEPT AND IN PRACTICE

National and Sector Balance Sheets are playing an increasingly important role in economic analysis. This article reviews the actual and potential applications and considers whether there is a case for modifying SNA practice and recommendations to increase the value of the contribution that balance sheets can make to analytical work.
The major sections of the article relate respectively to financial and non-financial items in national and sector balance sheets. In the context of financial items, there is discussion of the perception of what constitutes an individual's total financial portfolio and therefore which items should be included or excluded when assessing the financial assets of the household sector (e.g. various forms of pension entitlement and life assurance). The relevance of marketability is considered as is the possibility of attempting to identify a separate domestic households sub-sector. The other main topic considered in relation to financial balance sheets is the relevance of adopting a single approach to valuation; alternatives are considered in relation to the stock of public sector debt.
So far as non-financial assets are concerned, difficulties arise with the national accounting practice of treating the acquisition of consumer durables and military assets as current expenditure. While it is considered, on balance, best to continue to treat the purchase of consumer durables as current expenditure, though recording the value of the stock of durables outside the main body of balance sheets, it is recommended that "non-fighting" assets such as transport ships and aircraft and hospitals should be treated as capital assets. The treatment of sub-soil assets and the valuation of fixed assets is also discussed.
Reconciling balance sheets with flows data is an essential step if balance sheets are to be fully exploited; some comments are offered on the UN guidelines on this topic.     

THE NATIONAL BALANCE SHEET OF THE UNITED KINGDOM

The paper discusses national balance sheets in the light of the proposals for their inclusion in the revised SNA. The author uses his own estimated national balance sheet of the United Kingdom as a basis for discussing the problems encountered in the compilation of national balance sheets, and the greater part of the paper is concerned with questions of valuation, classification and statistical source material. The concluding section deals briefly with the structure of the national balance sheet of the United Kingdom and compares its structure with that of the national balance sheet of the United States. Provisional national balance sheets of the United Kingdom for each of the five years 1957 to 1961 are presented.     

FINANCIAL ACCOUNTS AND BALANCE SHEETS: ISSUES FOR THE REVISION OF SNA

This paper is an abridged version of a report with the same title originally written for the United Nations Statistical Office, as a part of the ongoing review of the System of National Accounts. Its purpose is to identify the issues in the financial statistics area that need to be considered in the course of the review. Particular attention is paid to problems of harmonization of SNA with related standards of the International Monetary Fund. The 1968 SNA provided a place in the framework for financial accounts and balance sheets, but did not develop them in any detail. In the 19 years since the revised SNA was published, policy and analytic interest in financial questions has greatly increased, and much work has been done on conceptual development and statistical compilation of financial statistics, both within and outside of the SNA framework. It is now apparent that some of the early decisions taken when financial considerations were not the focus of attention need reconsideration, some of the makeshift solutions that have grown up over time are no longer adequate, and some issues that have not been dealt with at all need to be addressed. This paper is not intended to propose solutions, but rather to reflect questions that have been raised, and to present alternatives that have been proposed.     

EXTERNAL BALANCE SHEETS: CONCEPTS AND EMPIRICAL APPROXIMATION*

International financial relationships should be interpreted in the context of a comprehensive conceptual framework; this paper advocates the use of concepts developed to measure and analyze balance of payments flows. Broad-based, empirical estimates of the international wealth of most countries of the western world are presented on the basis of cumulating balance of payments flows over a lengthy period. Among the more interesting aspects of the results are: the importance of intra-industrial country capital flows in a global context; the propensity of debtors to regard a larger share of their aggregate external debt as long term than do their creditors; the overwhelming importance of banks located in the industrial countries in global external asset and liability positions, and the preponderance of short-term positions taken by those banks; and the tendency for balance of payments records to report more direct investment assets than liabilities. The paper also contains some observations, based on the cumulations of balance of payments capital flows, concerning the nature and size of certain deficiencies in alternative sources–particularly the World Bank's Debtor Reporting System, and the Bank for International Settlements' banking data–of information on outstanding external debt positions.