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K. Belgibaeva, Associate Professor, Candidate ofScience in Economy, Kazakh-British Technical University, department of "Economics and Management", Almaty, Kazakhstan, [email protected]
INTERNATIONAL COMPARISONS OF FINANCING ACTIVITIES OF BANKS
Экономические преобразования в мире требуют совершенствования методологии статистического исследования макроэкономических процессов в финансовой сфере, основанных на получении сопоставимой информации. Выпуск косвенно-измеряемых услуг финансового посредничества (КИУФП) рассчитывается как разность между доходами от собственности, полученными от процентов банков по кредитам, и доходами, выплаченными ими процентов по депозитам. При сравнении КИУФП и их факторов между странами мира, важно учесть методологические вопросы их сопоставимости. Для этого стоимостные показатели должны быть выражены в единой валюте и за единый базовый период времени. В частности, по паритету покупательной способности в долларах США за 2005 г. Кроме того, следует использовать относительные показатели: КИУФП доход на душу населения и КИУФП в процентах к ВВП. Они характеризуют уровень развития финансового посредничества в банках страны и степень их распространения. Такие показатели необходимы для исследования комплекса макроэкономических факторов. Применение метода параллельных рядов выявило, что изменения косвенно-измеряемых услуг финансового посредничества в Казахстане, Армении, Кыргызстане зависят от изменения цен на товары и услуги, чистых налогов за вычетом субсидий на продукты.
Globalization and integration processes developing in the world economy have become especially apparent in the financial sector since the second half of 2007. These processes have caused a need for specification of the ways of economy development further. Deep social and economic transformations put forward the tasks to improve methods of statistical research of macroeconomic processes for assessing financing activities of different countries. Such methodological approaches include: compatibility of indicators based on the national accounts, use of the single currency for conversion of indicators, use of methods of generalizing values and parallel ranges.
The activities of the institutional units of financial corporations sector are diverse and they are characterized by a system of indicators. One of them is an output of financial intermediation services indirectly measured (FISIM). In the UN System of National Accounts (UNSNA) financial intermediation services indirectly measured
(FISIM) relate to the market services of financial intermediaries!. In Kazakhstan the second-tier banks serve as such financial intermediaries. The banks don't charge explicitly for financial intermediation services, and the value of financial intermediation services is measured by indirect, simplified method in majority of countries of the world under the 1968 SNA2,3,4,5. The essence of simplified method approach to financial intermediation service is in evaluation of FISIM at the macro-level by allocating directly the amounts of the services to intermediate consumption of a notional industry and equaling the output to zero. Application of such methodological approach allows avoiding the practical complications arising in the process of allocation ofthe amounts of financial intermediation services to concrete institutional units of economy. However, the aggregate value of GDP is underestimated as a result of the simplified approach, since a portion of costs of the financial intermediation services shall be charged to the final consumption and
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export. Their value equals the difference between the property income, received from the bank loan interest and the deposit interest income. FISIM is deducted from gross value added to arrive at GDP. The 1993 SNA also admitted the possibility of using the simplified approach in allocation of the amounts of financial intermediation services. An updated version of the 2008 SNA recommends allocating the output of financial intermediation services to concrete directions of use: intermediate consumption, final consumption, export, and import of financial services. However, this method is under development.
A number of methodological problems of compatibility appear when comparing FISIM and other value indicators between countries in order to have an objective appraisal of the status and development of ongoing
processes. First, statistical indicators shall be calculated based on one methodological principle. Secondly, the value indicators should be
expressed in the single currency and for abase period of time. In the third place, the relative and average values must be used. In the fourth place, it is necessary to make a complex research of the factors that discover trends in the development of national economy. Thereupon, the global GDP and its components are valued by the UN Statistical Commission based on purchasing power parity (PPP). The purchasing power parity (PPP) represents a rate of conversion that balances exchange rates of different currencies. It expresses the price ratio. PPP measures, for example, a number of units of Kazakhstan currency required in Kazakhstan to buy the same amount of appropriate goods
and services for a unit of Armenian currency in Armenia. All aggregates in the world statistical practice are recalculated in base prices of 2005, and then they are converted in US dollars using the 2005 PPP. Out of 192 countries of the world including those that use the simplified method of valuation of FISIM, information from 2000 till 2008 is available for three countries: Kazakhstan, Armenia and Kyrgyzstan. This is a reason for selecting two CIS countries for comparison with Kazakhstan.
The evolution of FISIM in three CIS countries is presented in Table 1. Data in Table 1 shows unstable development of FISIM in Kazakhstan and its susceptibility to wavy fluctuating processes. This period of time is split into two parts: growth and decline of FISIM. For three years from 2000
till 2003 the FISIM amounts increased 6,2 times, and
between 2003 and 2008, on the contrary, they fell 11 times. Most dramatic decrease in FISIM took place in critical year of 2004, when their amounts had been reduced 6 times in comparison with 2003.
A year later, in 2005 compared to 2004, they decreased 2,1 times. In 2004 and 2005 the Kazakhstan banks had been in financial instability which was a sign of crisis. In 2005 - 2008 the amounts of FISIM didn't even reach the amounts of 2000, they were 1,8-2,1 times less of the level of2000.
Between 2000 and 2004 the FISIM in Armenia had been increasing in geometric progression, 54 times as opposed to Kazakhstan. From 2005 there was a decline, so in 2008 FISIM had fallen to 11,1 % compared to 2004.
Table 1
Dynamics of FISIM absolute amounts in CIS countries as per the 2005 PPP, in millions US$6
Country Years
2000 2001 2002 2003 2004 2005 2006 2007 2008
Kazakhstan 959 2340 5118 5922 983 462 549 488 537
Armenia 2 7 48 41 108 104 94 100 96
Kyrgyzstan 186 186 186 207 195 179 154 127 132
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The same years the amounts of FISIM had declined in Kyrgyzstan. The amounts of FISIM had been reduced to 29 % in 2008 in comparison with 2000. The first three years (2000 - 2002) the amounts of FISIM were constant. Within one year in 2003 they increased by 11,2 %, and then they had been decreasing annually from 2004 till 2008. Smaller amount of FISIM had been observed in Kyrgyzstan during the crisis year of 2007.
In our opinion, FISIM per capita and FISIM in percentage to GDP, as relative indicators, characterize a level of development of the bank financial intermediation and degree of their dissemination in the country. The relative levels of FISIM in Kazakhstan and Kyrgyzstan had fallen abruptly. The levels of FISIM per each citizen of Kazakhstan had been reduced in average from 64 USD in 2000 to 34 USD in 2008. FISIM per capita in Kyrgyzstan had been reduced from 38 USD in 2000 to 25 USD in 2008.
FISIM in percentage to GDP had been also decreasing in these countries. In Kazakhstan the level of the indicator reduced 3,6 times, in Kyrgyzstan - 1,9 times. Within dynamic ranges the levels of FISIM reproduce fully their absolute amounts presented in table 1. So, in Kazakhstan the highest levels of FISIM per capita and in percentage to GDP were in 2003 - USD 397 and 6,48 %, respectively, and the lowest levels were in 2005 - USD 31 and 0,37 %, respectively. Approximately similar situation took place in Kyrgyzstan. In 2003 there were high relative levels at large absolute amounts of FISIM, and in 2007, on the contrary, there were low relative levels at smaller absolute FISIM. In Armenia, the FISIM had been growing annually from 1 USD per each resident in 2000 up to 30 USD in 2008. With regard to GDP the level of FISIM also increased from 0,03 % in 2000 to 0,56 % in 2008.
Comparing financing activities of the banks of Armenia, Kazakhstan and Kyrgyzstan with the help of relative macroeconomic indicators and simple statistical research methods has detected certain regularities:
1. Growth in the levels of economic development in Kazakhstan, Kyrgyzstan and Armenia by indicators per each citizen, such as GDP, final consumption expenditures, gross capital accumulation, foreign trade activity. Increase in GDP was mainly due to increase in price ofgoods and services.
2. The existing dynamics of population size in three countries didn't have any significant impact on development of FISIM and other macroeconomic indicators. During these years the growth rates of population size had varied insignificantly: in Kazakhstan - from -0,2 % to +1,1 %, in Armenia - from -0,1 % to +0,1 %, and in Kyrgyzstan - from ot 0,8 % tol,l %.
3. The following has been detected inter three countries: differentiation in the structure of GDP use, unstable ratios of final consumption expenditures to capital accumulation and product taxes less subsidies.
4. The FISIM evolution in three countries is divided into periods:
a) FISIM had been increasing since 2000: in Armenia till 2005, in Kazakhstan and Kyrgyzstan till 2004 at decrease in product taxes less subsidies and relatively smaller levels of GDP deflators (less than 100 %);
b) FISIM had been falling till 2008: in Armenia from 2005, in Kazakhstan and Kyrgyzstan from 2004 at increase in product net taxes and GDP deflator during these years.
Thereby, rise in prices of goods and services and increase in net taxes for products have caused the changes in preferences and potential opportunities of the population of three countries. They stipulated the decline in absolute amounts and relative levels of the banks' financial intermediations services indirectly measured per capita and in percentage to GDP. t
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