Decision of the European Central Bank

of 11 December 2008

amending Decision ECB/2006/17 on the annual accounts of the European Central Bank

(ECB/2008/22)

(2009/98/EC)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 26.2 thereof,

Whereas:

(1) Decision ECB/2006/17 of 10 November 2006 on the annual accounts of the European Central Bank [1] needs to be amended to reflect policy decisions and market developments.

(2) The European Central Bank (ECB) has revised its disclosure policy for securities transactions with a view to enhance further the transparency of the ECB’s annual accounts. As part of the revised policy, securities that previously qualified as financial fixed assets should be reclassified from the balance sheet item "Other financial assets" to the appropriate item under the heading "asset" depending on the origin of the issuer, the currency denomination and on whether the securities are held-to-maturity. Moreover, all financial instruments that are part of an earmarked portfolio should be included under the item "Other financial assets".

(3) Decision ECB/2006/17 does not contain specific rules on the accounting of forward interest rate swaps, foreign exchange futures and equity futures. Such instruments are increasingly used in the financial markets and may be relevant to the management of the ECB’s foreign reserves. While forward interest rate swaps should be accounted for in the same manner as "plain vanilla" interest rate swaps, foreign exchange futures and equity futures should be accounted for in the same manner as interest rate futures,

HAS DECIDED AS FOLLOWS:

Article 1

Amendments

Decision ECB/2006/17 is amended as follows:

1. Article 8 is amended as follows:

(a) Paragraph 2 is replaced by the following:

"2. The revaluation of gold, foreign currency instruments, securities other than those classified as held-to-maturity and non-marketable securities, as well as financial instruments, both on-balance-sheet and off-balance-sheet, shall be performed at the year-end at mid-market rates and prices."

(b) The following paragraph 4 is added:

"4. Securities classified as held-to-maturity and non-marketable securities shall be valued at amortised costs and shall be subject to impairment."

2. Article 10 is replaced by the following:

"Article 10

Marketable equity instruments

Marketable equity instruments shall be accounted for in accordance with Article 9 of Guideline ECB/2006/16."

3. Article 16 is replaced by the following:

"Article 16

Future contracts

Future contracts shall be accounted for in accordance with Article 16 of Guideline ECB/2006/16."

4. In Article 17 the following sentence is added:

"In the case of forward interest rate swaps the amortisation shall begin from the value date of the transaction."

5. Annexes I and III to Decision ECB/2006/17 are amended in accordance with the Annex to this Decision.

Article 2

Final provision

This Decision shall enter into force on 31 December 2008.

Done at Frankfurt am Main, 11 December 2008.

The President of the ECB

Jean-Claude Trichet

[1] OJ L 348, 11.12.2006, p. 38.

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ANNEX

Annexes I and III to Decision ECB/2006/17 are amended as follows:

1. The table entitled "Assets" in Annex I is replaced by the following:

"ASSETS

Balance sheet item | Categorisation of contents of balance sheet items | Valuation principle |

Assets

1Gold and gold receivables | Physical gold, i.e. bars, coins, plates, nuggets, in storage or "under way". Non-physical gold, such as balances in gold sight accounts (unallocated accounts), term deposits and claims to receive gold arising from the following transactions: (i) upgrading or downgrading transactions; and (ii) gold location or purity swaps where there is a difference of more than one business day between release and receipt | Market value |

2Claim on non-euro area residents denominated in foreign currency | Claims on counterparties resident outside the euro area including international and supranational institutions and central banks outside the euro area denominated in foreign currency | |

2.1Receivables from the International Monetary Fund (IMF) | (a)Drawing rights within the reserve tranche (net)National quota minus balances in euro at the disposal of the IMF. The No 2 account of the IMF (euro account for administrative expenses) may be included in this item or under the item "Liabilities to non-euro area residents denominated in euro" | (a)Drawing rights within the reserve tranche (net)Nominal value, translation at the foreign exchange market rate |

(b)Special drawing rightsHoldings of special drawing rights (gross) | (b)Special drawing rightsNominal value, translation at the foreign exchange market rate |

(c)Other claimsGeneral arrangements to borrow, loans under special borrowing arrangements, deposits within the framework of the Poverty Reduction and Growth Facility | (c)Other claimsNominal value, translation at the foreign exchange market rate |

2.2Balances with banks and security investments, external loans and other external assets | (a)Balances with banks outside the euro area other than those under asset item "Other financial assets"Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions | (a)Balances with banks outside the euro areaNominal value, translation at the foreign exchange market rate |

(b)Security investments outside the euro area other than those under asset item "Other financial assets"Notes and bonds, bills, zero bonds, money market paper, equity instruments held as part of the foreign reserves, all issued by non-euro area residents | (b)(i)Marketable securities other than held-to-maturityMarket price and foreign exchange market rateAny premiums or discounts are amortised |

(b)(ii)Marketable securities classified as held-to-maturityCost subject to impairment and foreign exchange market rateAny premiums or discounts are amortised |

(b)(iii)Non-marketable securitiesCost subject to impairment and foreign exchange market rateAny premiums or discounts are amortised |

(b)(iv)Marketable equity instrumentsMarket price and foreign exchange market rate |

(c)External loans (deposits) to non-euro area residents other than those under asset item "Other financial assets" | (c)External loansDeposits at nominal value, translated at the foreign exchange market rate |

(d)Other external assetsNon-euro area banknotes and coins | (d)Other external assetsNominal value, translation at the foreign exchange market rate |

3Claims on euro area residents denominated in foreign currency | (a)Security investments inside the euro area other than those under asset item "Other financial assets"Notes and bonds, bills, zero bonds, money market paper, equity instruments held as part of the foreign reserves, all issued by euro area residents | (a)(i)Marketable securities other than held-to-maturityMarket price and foreign exchange market rateAny premiums or discounts are amortised |

(a)(ii)Marketable securities classified as held-to-maturityCost subject to impairment and foreign exchange market rateAny premiums or discounts are amortised |

(a)(iii)Non-marketable securitiesCost subject to impairment and foreign exchange market rateAny premiums or discounts are amortised |

(a)(iv)Marketable equity instrumentsMarket price and foreign exchange market rate |

(b)Other claims on euro area residents other than those under asset item "Other financial assets"Loans, deposits, reverse repo transactions, sundry lending | (b)Other claimsDeposits and other lending at nominal value, translated at the foreign exchange market rate |

4Claims on non-euro area residents denominated in euro | | |

4.1Balances with banks, security investments and loans | (a)Balances with banks outside the euro area other than those under asset item "Other financial assets"Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions in connection with the management of securities denominated in euro | (a)Balances with banks outside the euro areaNominal value |

(b)Security investments outside the euro area other than those under asset item "Other financial assets"Equity instruments, notes and bonds, bills, zero bonds, money market paper, all issued by non-euro area residents | (b)(i)Marketable securities other than held-to-maturity Market priceAny premiums or discounts are amortised |

(b)(ii)Marketable securities classified as held-to-maturityCost subject to impairmentAny premiums or discounts are amortised |

(b)(iii)Non-marketable securitiesCost subject to impairmentAny premiums or discounts are amortised |

(b)(iv)Marketable equity instrumentsMarket price |

(c)Loans to non-euro area residents other than those under asset item "Other financial assets" | (c)Loans outside the euro areaDeposits at nominal value |

(d)Securities issued by entities outside the euro area other than those under asset item "Other financial assets"Securities issued by supranational or international organisations, e.g. the European Investment Bank, irrespective of their geographical location | (d)(i)Marketable securities other than held-to-maturityMarket pricePremiums/discounts are amortised |

(d)(ii)Marketable securities classified as held-to-maturityCost subject to impairmentAny premiums or discounts are amortised |

(d)(iii)Non-marketable securitiesCost subject to impairmentAny premiums or discounts are amortised |

4.2Claims arising from the credit facility under ERM II | Lending according to the ERM II conditions | Nominal value |

5Lending to euro area credit institutions related to monetary policy operations denominated in euro | Items 5.1 to 5.5: transactions according to the respective monetary policy instruments described in Annex I to Guideline ECB/2000/7 of 31 August 2000 on monetary policy instruments and procedures of the Eurosysten [1] | |

5.1Main refinancing operations | Regular liquidity-providing reverse transactions with a weekly frequency and normally a maturity of one week | Nominal value or repo cost |

5.2Longer-term refinancing operations | Regular liquidity-providing reverse transactions with a monthly frequency and normally a maturity of three months | Nominal value or repo cost |

5.3Fine-tuning reverse operations | Reverse transactions, executed as ad hoc transactions for fine-tuning purposes | Nominal value or repo cost |

5.4Structural reverse operations | Reverse transactions adjusting the structural position of the Eurosystem vis-à-vis the financial sector | Nominal value or repo cost |

5.5Marginal lending facility | Overnight liquidity facility at a pre-specified interest rate against eligible assets (standing facility) | Nominal value or repo cost |

5.6Credits related to margin calls | Additional credit to credit institutions, arising from value increases of underlying assets regarding other credit to these credit institutions | Nominal value or cost |

6Other claims on euro area credit institutions denominated in euro | Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions in connection with the management of security portfolios under the asset item "Securities of euro area residents denominated in euro", including transactions resulting from the transformation of former foreign currency reserves of the euro area, and other claims. Correspondent accounts with non-domestic euro area credit institutions. Other claims and operations unrelated to monetary policy operations of the Eurosystem | Nominal value or cost |

7Securities of euro area residents denominated in euro | Securities other than those under asset item "Other financial assets": Equity instruments, notes and bonds, bills, zero bonds, money market paper held outright including government securities stemming from before EMU denominated in euro; ECB debt certificates purchased for fine-tuning purposes | (i)Marketable securities other than held-to-maturityMarket priceAny premiums or discounts are amortised(ii)Marketable securities classified as held-to-maturityCost subject to impairmentAny premiums or discounts are amortised(iii)Non-marketable securitiesCost subject to impairmentAny premiums or discounts are amortised(iv)Marketable equity instrumentsMarket price |

8General government debt denominated in euro | Claims on government stemming from before EMU (non-marketable securities, loans) | Deposits/loans at nominal value, non-marketable securities at cost |

9Intra-Eurosystem claims | | |

9.1Claims related to promissory notes backing the issuance of ECB debt certificates | Only an ECB balance sheet item Promissory notes issued by NCBs, due to the back-to-back agreement in connection with ECB debt certificates | Nominal value |

9.2Claims related to the allocation of euro banknotes within the Eurosystem | Claims related to the ECB’s banknote issue, according to Decision ECB/2001/15 of 6 December 2001 on the issue of euro banknotes [2] | Nominal value |

9.3Other claims within the Eurosystem (net) | Net position of the following sub-items: | |

(a)net claims arising from balances of TARGET2 accounts and correspondent accounts of NCBs, i.e. the net figure of claims and liabilities — see also liability item "Other liabilities within the Eurosystem (net)" | (a)Nominal value |

(b)other intra-Eurosystem claims that may arise, including the interim distribution of ECB seigniorage income to NCBs | (b)Nominal value |

10Items in course of settlement | Settlement account balances (claims), including the float of cheques in collection | Nominal value |

11Other assets | | |

11.1Coins of euro area | Euro coins | Nominal value |

11.2Tangible and intangible fixed assets | Land and buildings, furniture and equipment including computer equipment, software | Cost less depreciation Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The useful life is the period over which a fixed asset is expected to be available for use by the entity. Useful lives of individual material fixed assets may be reviewed on a systematic basis, if expectations differ from previous estimates. Major assets may comprise components with different useful lives. The lives of such components should be assessed individually The cost of intangible assets includes the price for the acquisition of the intangible asset. Other direct or indirect costs are to be expensed Capitalisation of expenditure: limit based (below EUR 10000 excluding VAT: no capitalisation) |

11.3Other financial assets | Participating interests and investments in subsidiaries, equities held for strategic/policy reasonsSecurities including equities, and other financial instruments and balances including fixed-term deposits and current accounts held as an earmarked portfolioReverse repo transactions with credit institutions in connection with the management of securities portfolios under this item | (a)Marketable equity instrumentsMarket price(b)Participating interests and illiquid equity shares, and any other equity instruments held as permanent investmentsCost subject to impairment(c)Investment in subsidiaries or significant interestsNet asset value(d)Marketable securities other than held-to-maturityMarket pricePremiums/discounts are amortised(e)Marketable securities classified as held-to-maturity or held as a permanent investmentCost subject to impairmentAny premiums or discounts are amortised(f)Non-marketable securitiesCost subject to impairment(g)Balances with banks and loansNominal value, translated at the foreign exchange market rate if the balances/deposits are denominated in foreign currencies |

11.4Off-balance-sheet instruments revaluation differences | Valuation results of foreign exchange forwards, foreign exchange swaps, interest rate swaps, forward rate agreements, forward transactions in securities, foreign exchange spot transactions from trade date to settlement date | Net position between forward and spot, at the foreign exchange market rate |

11.5Accruals and prepaid expenditure | Income not due in, but assignable to the reported period. Prepaid expenditure and accrued interest paid (i.e. accrued interest purchased with a security) | Nominal value, foreign exchange translated at market rate |

11.6Sundry | (a)Advances, loans and other minor items. Loans on a trust basis | (a)Nominal value or cost |

(b)Investments related to customer gold deposits | (b)Market value |

(c)Net pension assets | (c)As per Article 22(3) |

12Loss for the year | | Nominal value |

2. In Annex III, the words "Transfer to/from provisions for foreign exchange rate and price risks" in the first column of the table under subheading 2.3 are replaced by the words "Transfer to/from provisions for foreign exchange rate, interest rate and gold price risks".

[1] OJ L 310, 11.12.2000, p. 1.

[2] OJ L 337, 20.12.2001, p. 52."

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