A short history of the CMFB

The CMFB, established by Council Decision in February 1991, held its inaugural meeting on 11 April 1991, electing Hans van Wijk (De Nederlandsche Bank) as its first chairman. At its second meeting, in June 1991, the committee defined the relationship with its working parties and adopted rules of procedure. At the January 1992 meeting, the statistical implications of the Maastricht Treaty were discussed, especially with respect to the Community Statistical Programme. In May 1992, the CMFB decided to establish the so-called Groupe de Réflexion to study the role of the CMFB in the new institutional environment that would be created with the start of Stage Two of Economic and Monetary Union (EMU). This Group proposed a pragmatic division of responsibilities between the Commission and the future European Monetary Institute (EMI) and European Central Bank (ECB); it identified an extensive field in which responsibilities should be shared on the basis of close co-operation. Furthermore, the Group offered the view that the committee should address its opinions not exclusively to the Commission but also to the EMI and that the EMI should be given the status of a full member of the CMFB; the same status should later be accorded to the ECB. Finally, the Group proposed the establishment of an Executive Body to conduct the committee's business between plenary meetings. The CMFB adopted the report of the Groupe de Réflexion in its January 1993 meeting, after which the Commission took steps to have the committee's Statute revised. The first Executive Body was elected to start its activities immediately. Also in January 1993, the committee decided to merge with its European Free Trade Area (EFTA) sister committee, in anticipation of the signing of the Treaty on the European Economic Area (EEA). This meant that Austria, Iceland, Finland, Norway and Sweden became represented in the committee.

The publication "Bridging the fault lines, the early years of the CMFB", written by Mr van Wijk, presents his personal view and further detail on developments up to 1999.

Once its institutional position was consolidated, the CMFB could give more attention to its advisory role. During the second term of office, of Bart Meganck (National Bank of Belgium) (April 1993-April 1995), it several times discussed the issue of the transfer of confidential data from the member states to Eurostat and it gave its opinion on a draft "Statistical Law" (see above). Very important was the decision, following a request by Eurostat, to assign to the Financial Accounts Working Party (FAWP) the task to prepare opinions on methodological questions raised by the application of the excessive deficit procedure (EDP), the fulfilment of which was a prerequisite of the member states' admission to the monetary union. During this term of office, the CMFB became also very much involved in the revision of the European System of Accounts (ESA). At the same time, the Balance of Payments Working Party (BOPWP) investigated the consequences of adopting the fifth version of the Balance of Payments Manual of the IMF.

On 1 January 1994, the CMFB received formally the status of a EU/EEA committee. At the same date, Stage Two of EMU started and the EMI was established. An important feature of this term of office was the intensified co-operation between Eurostat and the EMI. On 1 January 1995, the membership structure was changed by the entry of Austria, Finland and Sweden into the EU.

The third term of office (April 1995-April 1997), with Wolfgang Duchatczek (Oesterreichische Nationalbank) as chairman, was dominated by the CMFB's involvement in the EDP; after preparation by FAWP and the National Accounts Working Party (NAWP), the committee gave its opinion on the classification of a great number of unusual financial transactions of member states. In view of their sensitivity and importance, close attention was given to the procedure for dealing with such cases. The committee became involved in statistical preparations for Stage Three of EMU more widely. The co-operation between Eurostat and the EMI was in September 1995 formalised by the signing of a memorandum of understanding.

The first part of the fourth term of office, under John Kidgell (Office for National Statistics) (April 1997-April 1999), was dominated by debates about the treatment of various, often large, government transactions in the context of the EDP. The Committee played an active and key role in ensuring that the statistics provided for EDP were of the highest quality, statistically sound, and publicly available for scrutiny in the final preparations for the decision to proceed to the Third Stage of EMU in May 1998. Much attention was given to the definition of statistics required for the implementation of the Stability and Growth Pact, which was agreed at the Amsterdam Summit in June 1997. A very important development was the strengthening of the relationship of the CMFB with policy advisors and other users of statistics. This resulted in closer contact with the Monetary Committee (in 1999 transformed into the Economic and Financial Committee (EFC)) and the setting up of a Working Group Statistics which began work on identifying the priorities for improvement in the statistics used for co-ordination of economic policy in EMU. Their reports were endorsed by the EFC and ECOFIN. At the same time, the CMFB took the initiative to develop a new vision on the balance of payments as a basis for future initiatives in this area.

In June 1998, the ECB was established and on 1 January 1999 the third stage of EMU began with eleven countries constituting the monetary union. In a review of its scope, the CMFB had meanwhile reached the conclusion that its existence would remain useful in Stage Three of EMU. The "Statistical Law", which had finally entered into force in February 1997, confirmed the role of the CMFB in the process of co-operation between the Commission and the EMI (and the ECB).

During the fifth chairmanship, of Rafael Alvarez (Banco de Espana) (April 1999-April 2001), the CMFB continued to give much attention to the question of the collection of balance of payments data, which resulted in opinions on a common codification and on common reporting thresholds. Major efforts were given to the problem of asymmetries between the balances of payments of member states. The committee was also involved in the refinements of the ESA. The Committee built on its role as a forum for discussion between producers and users of statistics, and further developed relations with banking associations. Work arising from EFC reports on information requirements for EMU became increasingly important in CMFB discussions; an Action Plan to promote statistical improvements was presented to ECOFIN Ministers during this term.

During the sixth term of office, chaired by Steven Keuning (April 2001-September 2002), the continued involvement of the CMFB in several EDP consultations was quite important. More agreement was reached on the necessary directions for future balance of payments compilation in the EU and various drafts of a regulation in this area were discussed. The Committee initiated contacts with other bodies, such as those responsible for the implementation of accounting standards, in order to promote further harmonisation between accountants and statisticians. Moreover, great emphasis was put on the development of short-term economic statistics, particularly quarterly institutional sector accounts, along the lines of the EMU Action Plan. At the same time, the CMFB put the issue of the quality of statistics higher on the agenda and initiated a task force on output quality measurement. Finally, the CMFB also increased its communication with the outside world, among others by the development of this website and a separate logo.

During the seventh term of office, under Jean Cordier (Banque de France) (Dec 2002-Dec 2004), several sensitive consultations related to EDP were again required. In this context, the CMFB rules of procedures for EDP consultations were made fully explicit, were fixed and were unanimously endorsed by the membership. Further, several new members were welcomed and a revision of the general rules of procedure accommodated for this enlargement. Also the CMFB advised regularly on the achievement of the BoP regulation, the improvement of short term indicators and on different quality issues. The CMFB took decisive initiatives in the field of quarterly European sector accounts and it organized a regular assessment of the development of private accounting standards. It also made recommendations for an increasing cooperation in the implementation and use of IT standards and infrastructures. Moreover, the exchange of information with political authorities and users was strengthened, in order to increase awareness of the work of the CMFB beyond the Commission and to improve assistance to the EFC and the Ecofin.

Under the eighth term of office under Bill Keating (Central Statistics Office, Ireland) (January 2005 – December 2006), the work of the Committee was dominated by EDP matters. The CMFB provided general support for proposals for more verification powers regarding EDP and took an active role in the development of the implementation aspects. The resulting new regulation regarding the quality of EDP statistical data made statutory provision for CMFB’s role in relation to EDP matters for the first time. The Committee was proactive in response to the conclusions of the Ecofin Council of June 2005 requesting that the EFC should evaluate the role, areas of competence and functioning of the CMFB with regard specifically to its opinions on EDP matters. In November 2005, the Council noted that the current system based on CMFB consultations had worked well for many years and agreed to keep the CMFB and not to change the current set-up of the CMFB as an advisory body. A number of consultations on EDP matters were also undertaken during this term. The release in 2006 of annual sector accounts for the EU and the euro area was a major milestone. The Task force on Quarterly Sector Accounts played a key role in these developments. CMFB continued to play an important co-ordinating role in the move to develop quarterly European sector accounts. CMFB kept in constant touch with developments regarding the updating of the international statistical standards. With regard to one issue, the treatment of implicit liabilities related to unfunded employers’ pension schemes, the CMFB adopted a proposal for a common European position that resulted eventually in an acceptable compromise.

During the ninth term of office, under the chairmanship of Hans-Peter Glaab (Deutsche Bundesbank) (January 2007 – December 2008), the modified rules of procedure for CMFB consultations, prepared under the previous chairman, were finally adopted. A major consultation on EDP related statistics (on securitisation operations undertaken by government) was finalised and a new consultation (on accounting consequences for government in connection with the financial crisis) was started. Discussions on the update of international statistical manuals (revised SNA, BPM6, BD4 and the revision of ESA 95), including questions of implementation and coordination, played an important role in this period. This included the work of a special task force on the statistical measurement of assets and liabilities of pension schemes in general government. In the field of sector accounts, another milestone was reached with the first publication, in June 2007, of non-financial quarterly sector accounts for the EU and integrated quarterly financial and non-financial sector accounts for the euro area. There was a continuation of the work on balance of payments, Intrastat and Extrastat. In connection with the initiative for the reduction of administrative burdens, a task force performed an in-depth investigation into the possible consequences of an introduction of the single flow system in Intrastat for balance of payments statistics and national accounts. Upon a request from the Ecofin Council, the CMFB developed a set of guidelines for the public communication of major statistical revisions. It also started work on a general policy for revisions in national accounts and produced guidelines on seasonal adjustment.

The tenth term of office, under the chairmanship of Peter van de Ven (Statistics Netherlands) (January 2009 – December 2010), was dominated by the impact of the financial crisis. European financial institutions were significantly affected, and assistance had to be provided by EU governments. In addition and as the financial crisis developed into an economic crisis, governments of Member States experienced severe budgetary problems. In the first half of 2009, the CMFB was consulted on the recording of government interventions to support the financial system. The results of this - rather complex - consultation were not all reflected in the final decision by Eurostat. For the first time in the history of the CMFB, the decision partly deviated from the advice given which raised concerns among several CMFB members. At the end of the term, the CMFB also started a consultation on the recording of the European Financial Stability Facility (EFSF). The opinion was finalised on 25 January 2011. Another consultation, finalised on 6 August 2009, related to the revised EDP notification tables. Furthermore, the Editorial Committee, which was set up to review the individual chapters of the Manual on Governement Deficit and Debt (MGDD), finalised its work in early 2010. The complete MGDD (Third edition) was submitted to the CMFB and a favourable opinion was issued on 7 September 2010. Also with respect to the EDP, there was an invitation by Eurostat to the CMFB chairman to attend, as a country representative, three methodological visits to Greece, in order to examine the EDP-data compiled by the Greek authorities. In addition to the above EDP-related matters, the CMFB continued to contribute to the update of the conceptual framework for the new international guidelines, ESA 2010 and BPM6. The CMFB was consulted on the draft proposal for ESA 2010 in autumn 2010, and issued an opinion on 10 December 2010. To further improve the overall consistency of statistics and the co-operation between central banks and statistical offices, a survey was conducted among Member States on the implementation of the revised international guidelines. Progress, achieved on the harmonisation of national release and revision practices was limited. Furthermore, a number of presentations at the plenary meetings of the CMFB dealt with best practices in the cooperation between national institutes and national central banks. In relation to the timeliness of statistics, there was considerable debate on the necessity of compiling and publishing flash estimates for economic growth at 30 days after the end of the relevant quarter. Also in relation to quarterly sector accounts, there was, and will continue to be, discussion on timeliness issues.

During the eleventh term of office, under the chairmanship of João Cadete de Matos (Banco de Portugal) (January 2011 – December 2012) the future and role of the Committee was discussed leading to the creation of a Groupe de Réflexion (GdR) composed by national statistical institutes, national central banks, Eurostat and the ECB, trying to find an agreement on the foundations for strengthening the cooperation between the European Statistical System (ESS) and the European System of Central Banks (ESCB). A Memorandum of Understanding (MoU) was signed and it was decided to enhance the cooperation at strategic level between the ESS and ESCB by establishing the European Statistical Forum (the Forum) while the CMFB will be functioning as an operational platform. Throughout this chairmanship the Member-States agreed on implementing a harmonized revision policy for balance of payments/international investment position and national accounts, either in full or with specific exceptions, in September 2014 or just after. With the aim of deepening the cooperation within the CMFB, an inventory of Institutional Cooperation Agreements was created, illustrating good cooperation practices with other partners like the Ministry of Finance and with other user groups, on existing institutional cooperation agreements in the field of statistics. With the view of strengthening cooperation with other Committees, a Protocol between the CMFB and the European Committee of Central Balance-Sheet Data Offices (ECCBSO) was signed. During this period eleven CMFB consultations took place, of which ten were on EDP issues, as follows: low interest rate loans, emission trading permits, recording of some trade credits operations incurred by government units, amendment of the MGDD chapter on financial defeasance on the issue of partial rerouting, amendment of the chapter on recording interest, a new chapter on capital increases in multilateral development banks and amending the chapters on public infrastructure financed and exploited by corporations, on public-private partnerships (PPPs) and on Government guarantees a public corporations data questionnaire relating to the EDP notification tables, amendment of the chapter on financial defeasance . Following the update of the international methodological guidelines, the preparatory work continued with the presentation of the results of the Financial Intermediation Services Indirectly Measured Task Force and with the discussion of the harmonized recording of holding companies and head-offices. Presentations were made by countries describing the national plans for implementing the new international manuals. The new data reporting requirements (including the SDMX transmissions) were discussed. The development of statistics in the context of new European initiatives, such as the economic and financial indicators for multilateral surveillance (Excessive Imbalance Procedure) was identified as a key main action of the work programme. For celebrating the 20th Anniversary of the CMFB, Banco de Portugal published in 2011 the book “Promoting Excellence in European Statistics” (link). A workshop entitled “Fostering cooperation between the European Statistical System (ESS) and the European System of Central Banks (ESCB)” was also organized carrying out two working sessions to discuss best practices in interagency cooperation for statistical purposes between the ESS and the ESCB.