Financial Intermediation and Financial Accounts

Abstract

This chapter describes broad-based developments in financial intermediation and the problems these developments have represented for aggregate financial accounts, and comments on the ability of the new System of National Accounts 1993 (SNA 1993) (United Nations, 1993) to deal with such problems. The continued growth and greater degree of complexity of financial activity in the United States and elsewhere have been accompanied by an increase in institutions and types of transactions, which have blurred traditional classification schemes. Such changes call for continual flexibility in compiling national financial accounts. The outline for financial accounts in the new SNA appears to be broad enough to encompass most situations. A number of sound recommendations are made for handling specific types of financial activities. However, compilers must be careful not to make their accounts so general that much of the information useful for analysis and international comparisons will be hidden within large categories of transactions of a few large sectors.