The statistical classification of cash pooling activities

Arbeitspapier

Cash pooling is a bank service that allows corporates to externalise the intra-group cash management, and thus manage their global liquidity effectively with lower costs. Although there is little quantitative information on the significance of the phenomenon, cash pooling appears to have become increasingly popular after the onset of the financial crisis when, in an environment characterised by limited access to capital markets, reduced bank lending, low returns and higher risks on banks' deposits, corporate groups started to maximise their use of internal sources of financing. In particular, cash pooling is currently very relevant in Western and Northern European countries, and is mainly offered in the United Kingdom, France and the Netherlands. This paper first analyses cash pooling agreements with a focus on the aspects that are relevant from a statistical viewpoint. It then addresses their statistical recording in compliance with ESA 2010 and, specifically, the methodological framework of Monetary Financial Institutions (MFI) balance sheet item statistics. It is proposed that positions related to cash pooling shall be recorded on a gross basis vis-à-vis the actual beneficiaries and obligors of the corresponding accounts. However, the proposed treatment goes beyond MFI balance sheet statistics and affects other data domains as well, ranging from financial accounts to balance of payments and international investment positions. While the statistical approach may seem straightforward, applying it in practice is more difficult, not least because of the treatment of cash pooling contracts in accounting terms. The analysis is complemented by numerical examples and also includes data for the Netherlands, which show the importance of clarifying the statistical treatment of cash pooling in light of the large impact it may have on macroeconomic aggregates.

Object Details

• ISBN: 978-92-899-2417-7
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Statistics Paper ; No. 16

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Money Supply; Credit; Money Multipliers ; Interest Rates: Determination, Term Structure, and Effects ; Accounting
• Subject: accounting standards ; cash management ; cash pooling ; credit ; MFI balance sheet statistics ; monetary aggregates ; statistical standards

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Colangelo, Antonio
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2016

Further information

• DOI: doi:10.2866/6893
• Handle: http://hdl.handle.net/10419/154651
• Last update: 10.03.2025, 11:42 AM CET