Institutional Units and Sectors 11
2.17 International organizations may be global
or regional. Regional organizations arise from re-
gional arrangements such as customs unions, eco-
nomic unions, and monetary and currency unions.^4
Regional organizations consist of those institutions
whose members are governments or monetary au-
thorities^5 of economies that are located in a specifi c
region of the world. Th ey can be fi nancial, such as
regional development banks, or nonfi nancial, such
as entities involved in the governance of economic
unions. Regional organizations are not resident units
of any country.
2.18 Some regional organizations have been en-
dowed with the authority to raise taxes or other
compulsory contributions within the territories of
the countries that are members of the organization.
Th ese are sometimes described as “supranational au-
thorities.” Despite the fact that they fulfi ll some of the
functions of government within each member coun-
try, they are not resident units of any country.
2.19 Financial positions between the regional or-
ganization and resident institutional units outside the
general government or public sectors are not included
in the public sector statistics of a member country
because these organizations are not residents of that
country. When GFS are compiled for regional organi-
zations as if they constituted a separate government,
this Manual recommends that fi nancial positions be
classifi ed according to the member country that is the
counterparty to allow individual countries to evaluate
the impact of regional organizations on their economy.
2.20 In contrast to regional organizations, which
perform governmental functions, there may be re-
gional enterprises that are owned by two or more
governments and that operate as market producers.
If the enterprise has legal entities or separate branches
in each economy in which it operates, then identifi -
cation of these units and determination of their resi-
(^4) Th e regional central decision-making body in a currency union
is usually the currency union central bank (see paragraph 2.21).
For a discussion of currency unions and other regional arrange-
ments, see Appendix 5, and the BPM6, Appendix 3.
(^5) Monetary authorities encompass the central bank (which
subsumes other institutional units included in the central bank
subsector, such as currency boards) and certain operations
usually attributed to the central bank but sometimes carried out
by other government institutions or commercial banks, such as
government-owned commercial banks.
dence in the host economy of each of the branches are
obvious. However, if they operate as a seamless entity
in several economies, then the enterprise’s operations
are prorated between the economies, so that they are
included in the public sector statistics in the national
economies in which they operate. Th e procedures
should be applied consistently with the recording in
other macroeconomic statistics.^6
2.21 A currency union central bank is an interna-
tional fi nancial organization that acts as a common
central bank for a group of member countries. A cur-
rency union central bank is an institutional unit in its
own right, owning assets and liabilities on own ac-
count, and is nonresident of any currency union mem-
ber economy but resident in the currency union. Such
a bank typically has the headquarters located in one
country of the currency union and maintains national
offi ces in each of the member countries to conduct
some central bank functions. Each national offi ce acts
as the central bank for that country and is treated as
a resident institutional unit in that country. Th e head-
quarters, however, is an international organization.
Institutional Units^7
Defi nition of an Institutional Unit
2.22 An institutional unit is an economic entity
that is capable, in its own right, of owning assets, in-
curring liabilities, and engaging in economic activities
and in transactions with other entities. Some impor-
tant features of institutional units are:- Th e ability of an institutional unit to own goods
or assets in its own right means that it is also able
to exchange the ownership of goods or assets in
transactions with other institutional units. - An institutional unit is able to take economic
decisions and engage in economic activities for
which it is itself held directly responsible and ac-
countable by law. - An institutional unit is able to incur liabilities on
its own behalf, to take on other obligations or fu-
ture commitments, and to enter into contracts.
(^6) See the 2008 SNA, paragraph 4.13, and the BPM6, paragraphs
4.41–4.44.
(^7) Th e defi nitions and descriptions of institutional units are fully
consistent with the corresponding defi nitions and descriptions in
the 2008 SNA, Chapter 4. Hereaft er, “unit” is used as a short form
for “institutional unit” in some instances.