Methods For Calculating Financial Intermediation Services Indirectly Measured

With the rapid development of financial market, the business pattern of financial institution has changed dramatically. The current system of national accounting may not be suitable for all these changes. The constantly changing of risk management and liquidity transformation makes it more difficult to measure the output of financial intermediation services. Especially, the methods for calculating FISIM (financial intermediation services indirectly measured) have become an international problem.This article focuses on the methods for calculating FISIM, is based on the current methods of FISIM accounting, and takes the FISIM issues which still remain in SNA(2008) and their improvement as the core. Furthermore, methods for calculating FISIM are discussed comprehensively in four aspects:scope of FISIM accounting, production and use of FISIM accounting, determination of reference rate, price and volume measures of FISIM, etc. The goal is to follow-up the latest developments of FISIM accounting, analyze defects of the current SNA about FISIM accounting, and improve it as much as possible. Then this improvement would be applied to the Chinese practice in order to promote the development of the theory and practice of FISIM accounting in China. This article is divided into seven chapters. The arrangement of the chapters is as follow:The first chapter illustrates the research background of the topic and the current state of FISIM research at home and abroad. Then, the current problems and controversial issues are discussed about FISIM accounting, which lays the foundation for the next chapters.The second chapter focuses on illustrating connotation and denotation of the FISIM, so as to define the scope of FISIM accounting. This chapter discriminate the scope of FISIM accounting mainly from three aspects:accounting subject (the definition of financial institutions), accounting object (the constitute of financial service) and accounting carrier (the types of financial instruments). Especially risk management and liquidity transformation affect the price and volume of FISIM.The third chapter discusses the output and use of FISIM accounting. First, it illustrates the methods of FISIM accounting from the traditional theory to the latest connotation. Second, it summarizes the three methods of using apportioned share of FISIM, which relates to the allocation in institutional sector, industrial sector and nominal sector. Furthermore, it also discusses FISIM export in this chapter.The fourth chapter solves the problem of the choice of the reference rate. Firstly, it interprets the connotation and defect of the reference rate in the SNA. Secondly, it introduces three international typical methods of determining reference rate at present. And it gives some insights by analyzing the relationship between reference rate and risk or maturity at last.The fifth chapter studies the price and volume of FISIM accounting. It mainly discusses two volume accounting methods (reducing stock methods and the output indicator method) which are widely used currently. Combined with specific cases, it compares these two methods from the angle of their theory, advantages and limitations and operability.The sixth chapter analyses the problems and improvement measures of Chinese FISIM accounting. China should learn from the latest theory and method from abroad in order to seek improving method of Chinese FISIM accounting.The seventh chapter summarizes the main works and conclusions that have been taken in this paper. Then, this paper makes a summing up, analyses the shortage, and talks over some issue which need a further study.There are three main contribution in this article. They are as follows:Firstly, compared with similar research, the breakthrough point of this article is extremely concrete, so we can study all the aspects of FISIM accounting in a very specific angle. Secondly, we focus on the introduction and research of new methods. We keep the track of the latest developments of the international FISIM accounting, which essentially covers all the current cutting-edge issues and research directions of FISIM accounting:especially the discussion of risk management and fluidity transformation, price and volume measures of FISIM, the introductions of various reference interest rate and so on. Thirdly, compared with the SNA (2008) as well as advanced international accounting method, we examine the current situation of Chinese FISIM accounting, analyze the existing problems of Chinese FISIM accounting, seek for the disparity, and make a simple estimation of Chinese FISIM by comparing all kinds of possible reference rate in the case of existing data.