Government Finance Statistics Manual 2014

Institutional Units and Sectors 35

of government or place itself at risk, and therefore

is not a market producer and should be classifi ed

in the general government sector.

Financial Protection Schemes

2.132 Th e fi nancial infrastructure of an economy
may include fi nancial protection schemes to pro-
tect the assets of fi nancial institutions’ clients. Th ese
schemes are oft en referred to as deposit guarantee
schemes or deposit insurance schemes. Th e main
types of schemes provide protection of deposits or
protect policyholders against failing life and nonlife
insurance schemes. Th ese entities are known by vari-
ous names, but to determine their sector classifi cation,
the nature of their activities should be considered on a
case-by-case basis.

2.133 A fi nancial protection scheme is classifi ed
as part of the general government, a public fi nancial
corporation, or a private fi nancial corporation outside
the public sector according to the same sectorization
principles that apply to any other entity, as described
earlier in this chapter (see paragraph 2.124).

2.134 A resident fi nancial protection scheme may
or may not satisfy the criteria to be an institutional
unit. If it is not an institutional unit, it is treated as an
integral part of the institutional unit that controls it.

2.135 If the fees are set by government, or when
the government or a public corporation has control
over the fi nancial protection scheme through other
means, the scheme is to be included in the public sec-
tor. Th e following criteria should be considered in de-
termining whether the scheme is part of the general
government sector:

• If fees payable to government for such a protec-
  tion scheme are compulsory—that is, if benefi cia-
  ries cannot opt out of the scheme—the scheme is
  to be included in general government sector (see
  paragraph 5.74).


• If fees payable to government are clearly out of
  proportion to the service provided (fees are not
  determined based on the associated risks cov-
  ered), the scheme is to be included in general
  government sector (see paragraph 5.74).


• If fees payable to government are not set aside in a
  fund, or can be used for other purposes, the scheme
  is to be included in general government sector.
  
  
  • If the fees are proportional to the cost of the ser-
    vice provided, and the scheme is an institutional
    unit, it is classifi ed as an insurance corporation;
    operating a fund that functions on insurance
    rules may indicate proportionality and the exis-
    tence of a standardized guarantee scheme.
  
  
  
  

Special Purpose Entities.

2.136 While there is no internationally agreed-

upon defi nition of an SPE, some typical features are

that it has little physical presence, is related to another

corporation or government, and is oft en resident in

a territory other than the territory of residence of its

parent unit.^38

2.137 Governments may set up SPEs for fi nan-

cial convenience. For example, the SPE may be in-

volved in fi scal or quasi-fi scal activities (including

securitization of assets, borrowing, etc.). Resident^39

SPEs that function only in a passive manner relative

to general government and that carry out fi scal and

quasi-fi scal activities do not satisfy the criteria to

be institutional units and are therefore not treated

as separate institutional units in macroeconomic

statistics; they are treated as part of general govern-

ment regardless of their legal status. Resident SPEs

acting independently, acquiring assets and incurring

liabilities on their own behalf, accepting the associ-

ated risk, are treated as separate institutional units

and are classifi ed to a sector according to their prin-

cipal activity.

2.138 SPEs that are resident in a diff erent country

than their controlling government are always clas-

sifi ed as separate institutional units in the economy

where they are established. When such entities exist,

care must be taken to refl ect the fi scal activities of

government accurately. All fl ows and stock positions

between the general government unit and the non-

resident SPE should be recorded in the accounts for

general government and the rest of the world when

they occur.^40

2.139 A government may create a nonresident

SPE to undertake government borrowing or incur

(^38) SPEs are also discussed in the 2008 SNA, paragraphs 4.55–4.58.
(^39) For a defi nition of resident and nonresident units, see para-
graphs 2.6–2.15.
(^40) Examples of these imputations are described in the PSDS Guide,
Box 4.12.