5.146 This Annex explains a method which allows to show measures of money in the balance sheets and the financial accounts.

5.147 The definitions of the measures of money applied vary among countries and in time. In addition, these definitions are not necessarily based on the classification of financial assets and the classification of sectors as defined in the system. Therefore, measures of money are not defined in the system.

5.148 The following problems appear by integrating measures of money in the balance sheets and the financial accounts. Firstly, the measures of money may be composed of components which do not correspond with the classes, that is to say the categories, sub-categories and sub-positions, of financial assets and liabilities as defined in the system. For example, a measure of money may include only a sub-class of the category currency and deposits (AF.2). The sub-class may be defined by a reference to maturity and/or by a reference to the institutional units holding or issuing currency and deposits. Secondly, the measures of money may imply money-creating, money-holding and money-neutral sectors which cannot be composed of the sectors and sub-sectors as defined in the system. Thirdly, the data sources used for compiling monetary aggregates may in practice differ from the data sources used for compiling the balance sheets and the financial accounts of the sectors and the rest of the world.

5.149 In order to identify a measure of money MX in the balance sheets or the financial accounts, it may be necessary to subdivide any class i of financial assets and liabilities defined in the system into two sub-classes:

1. MXi: sub-class of financial assets (liabilities) classified in class i and included in the measure of money MX;
2. MX-i: sub-class of financial assets (liabilities) classified in class i but not included in the measure of money MX.

In practice, some classes of financial assets (liabilities) do not contribute even to broad measures of money, for example, monetary gold and SDRs (AF.1) or insurance technical reserves (AF.6). Therefore, MX1 and MX6 would be zero, that is to say a breakdown of AF.1 in MX1 and MX-1 or of AF.6 in MX6 and MX-6 is not necessary.

5.150 The measure of money MX is equal to the sum of all sub-classes of financial assets MXi of the money-holding sectors and MX is equal to the sum of all sub-classes of liabilities MXi of the money-creating sectors.

5.151 A main advantage of this method is its flexibility. In cases where the definition of a measure of money is changed, only the breakdowns of some classes of financial assets and liabilities into MXi and MX-i have to be adapted.

MEASURES OF MONEY IN THE BALANCE SHEETS OR THE FINANCIAL ACCOUNTS