ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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the ECB’s net profit for the year is less than itsincome earned on euro banknotes in circulation,and subject to any decisions by the GoverningCouncil to make transfers to a provision forforeign exchange rate, interest rate and goldprice risks and/or to charge costs incurred by theECB in connection with the issue and handlingof euro banknotes against this income.RECLASSIFICATIONSA number of items were reclassified in 2008 forpresentational reasons and the comparablebalances as at 31 December 2007 have beenadjusted accordingly. These reclassifications aredescribed in the Notes on the Balance Sheet. 9OTHER ISSUESTaking account of the ECB’s role as a centralbank, the Executive Board considers that thepublication of a cash flow statement would notprovide the readers of the financial statementswith any additional relevant information.In accordance with Article 27 of theStatute of the ESCB, and on the basis of arecommendation of the Governing Council,the EU Council has approved the appointmentof PricewaterhouseCoopers AktiengesellschaftWirtschaftsprüfungsgesellschaft as the externalauditors of the ECB for a five-year period up tothe end of the financial year 2012.9The reclassifications comply with the accounting policies of theECB laid down in Decision ECB/2006/17, OJ L 348, 11.12.2006,p. 38, as amended.ECBAnnual Report2008223
NOTES ON THE BALANCE SHEET1 GOLD AND GOLD RECEIVABLESAs at 31 December 2008 the ECB held17,156,546 ounces of fine gold (2007:18,091,733 ounces). The reduction was due to(a) sales of 963,987 ounces of fine gold inaccordance with the Central Bank GoldAgreement, which came into effect on27 September 2004 and of which the ECB is asignatory, and (b) the transfer by the CentralBank of Cyprus and the Central Bank of Maltato the ECB of 19,151 and 9,649 ounces of finegold 10 respectively upon the adoption of thesingle currency by Cyprus and Malta, inaccordance with Article 30.1 of the Statute ofthe ESCB. The decrease in the euro equivalentvalue of this holding, resulting from thesetransactions, was more than offset by asignificant rise in the price of gold during 2008(see “Gold and foreign currency assets andliabilities” in the notes on accounting policies).2 CLAIMS ON NON-EURO AREA AND EUROAREA RESIDENTS DENOMINATED IN FOREIGNCURRENCYRECEIVABLES FROM THE IMFThis asset represents the ECB’s holdingsof special drawing rights (SDRs) as at31 December 2008. It arises as the result of atwo-way SDR buying and selling arrangementwith the International Monetary Fund (IMF),whereby the IMF is authorised to arrangesales or purchases of SDRs against euro,on behalf of the ECB, within minimum andmaximum holding levels. The SDR is definedin terms of a basket of currencies. Its valueis determined as the weighted sum of theexchange rates of four major currencies (euro,Japanese yen, pound sterling and US dollar).For accounting purposes, SDRs are treatedas a foreign currency (see “Gold and foreigncurrency assets and liabilities” in the notes onaccounting policies).BALANCES WITH BANKS AND SECURITYINVESTMENTS, EXTERNAL LOANS AND OTHEREXTERNAL ASSETS; AND CLAIMS ON EURO AREARESIDENTS DENOMINATED IN FOREIGN CURRENCYThese two items consist of balances with banksand loans denominated in foreign currency,and investments in securities denominated inUS dollars and Japanese yen. The amortisationof discounts and premiums on securitiesdenominated in foreign currency was previouslyincluded under the headings “Accruals andprepaid expenses” and “Accruals and incomecollected in advance” respectively. The ECB hasdecided, for presentational reasons, to reclassifythese items under the heading “Balances withbanks and security investments, external loansand other external assets”. The comparablebalances as at 31 December 2007 have beenadjusted accordingly.Claims onnon-euro arearesidents2008€2007€Change€Currentaccounts 5,808,582,148 761,073,851 5,047,508,297Money marketdeposits 573,557,686 688,783,688 (115,226,002)Reverserepurchaseagreements 379,961,453 543,247,188 (163,285,735)Securityinvestments 34,501,999,345 26,728,314,185 7,773,685,160Total 41,264,100,632 28,721,418,912 12,542,681,720Claims oneuro arearesidents2008€2007€Change€Currentaccounts 619,534 574,945 44,589Money marketdeposits 22,225,263,177 3,867,588,514 18,357,674,663Total 22,225,882,711 3,868,163,459 18,357,719,252The increase in current accounts held withnon-euro area residents is due mainly to(a) the settlement of the Danish krone leg of swaptransactions with Danmarks Nationalbank thatwere outstanding on 31 December 2008 amounting10The transfers, with an aggregate value equivalent to €16.5 million,were made with effect from 1 January 2008.224 ECBAnnual Report2008
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EN2008EUROPEAN CENTRAL BANK ANNUAL
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© European Central Bank, 2009Addre
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CHAPTER 4FINANCIAL STABILITY AND IN
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7 Statistical accounting consequenc
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ABBREVIATIONSCOUNTRIESOTHERSBE Belg
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in the course of the year, in line
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currencies, T2S will be a major ste
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CHAPTER 1ECONOMICDEVELOPMENTS ANDMO
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Chart 1 ECB interest rates and mone
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Despite moderating, the annual grow
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substantial downward revisions in r
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in July, annual inflation in the OE
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As regards the Chinese economy, rea
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generally tighter financing conditi
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were recorded in December, but thes
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was driven mainly by developments i
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market tensions, particularly for l
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anking and financial system. At the
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cash flows to compensate for a redu
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quarter of 2008 and -0.1% in Decemb
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whereby investors’ uncertainty su
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September onwards, amid the great u
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Chart C Trading volumes for governm
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sponsored rescue plans were initiat
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The annual growth rate of consumer
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end of 2007. By December 2008 this
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calculated as the balance between g
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commodity prices (see Box 4). Conve
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Chart D Longer-term inflation expec
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apidly to 1.7% in December, mainly
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productivity slowed to 0.2% in the
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Table 3 Composition of real GDP gro
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Corporate investment, which had exp
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Box 5LABOUR MARKET DEVELOPMENTS IN
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Chart C Breakdown of employment gro
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Box 6DEVELOPMENTS IN THE ISSUANCE A
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Chart B Government bond yield sprea
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Box 7STATISTICAL ACCOUNTING CONSEQU
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warranted because of the need to co
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sharp depreciation of the euro was
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prices in the first eight months of
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focused more on the production rath
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segments and, in turn, affected eur
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and Bulgaria registered robust grow
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In the remaining non-euro area EU c
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Estonian kroon and the Lithuanian l
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Table 10 Official monetary policy s
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the Bank of England and Sveriges Ri
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CHAPTER 2CENTRAL BANKOPERATIONSAND
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Box 10MONETARY POLICY OPERATIONS DU
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Chart A Liquidity supply through op
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franc funding needs of banks with n
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MINIMUM RESERVE SYSTEMCredit instit
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with the ample allotments in the fi
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2008. By contrast, the average shar
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and SDR holdings increased by aroun
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and the ECB). As a result of carefu
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cross-CSD settlement. T2S will thus
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ELIGIBLE LINKS BETWEEN NATIONAL SEC
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Chart 48 Number of euro banknotes i
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3.3 BANKNOTE PRODUCTION AND ISSUANC
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4 STATISTICSThe ECB, assisted by th
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iii) payments statistics and iv) de
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5 ECONOMIC RESEARCHThe main functio
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were organised to disseminate resea
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the Financial Collateral Directive,
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on the Banque centrale du Luxembour
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standards by individual Eurosystem
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CHAPTER 3ENTRY OF SLOVAKIAINTO THE
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Table 13 Main economic indicators f
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As of January 2009 Slovakia is thus
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3 OPERATIONAL ASPECTS OF THE INTEGR
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4 THE CASH CHANGEOVER IN SLOVAKIATH
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Willem F. Duisenberg accepting the
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1 FINANCIAL STABILITYThe Eurosystem
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With regard to merger and acquisiti
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with the principles set out in Octo
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2.2 BANKINGCAPITAL REQUIREMENTS DIR
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3 FINANCIAL INTEGRATIONThe Eurosyst
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The market for short-term paper in
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de France and the Banca d’Italia.
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and the Eurosystem’s business con
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4.2 RETAIL PAYMENT SYSTEMS ANDINSTR
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for Clearing and Settlement, and th
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Willem F. Duisenberg at his farewel
Page 173 and 174: 1 EUROPEAN ISSUESIn 2008 the ECB co
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Page 177 and 178: 1.3 DEVELOPMENTS IN AND RELATIONS W
Page 179 and 180: On a number of occasions in 2008, t
Page 181 and 182: countries have voiced support for t
Page 183 and 184: Former Italian President Carlo Azeg
Page 185 and 186: 1 ACCOUNTABILITY VIS-À-VIS THE GEN
Page 187: implementation of the steps foresee
Page 190 and 191: CHAPTER 7EXTERNALCOMMUNICATION
Page 192 and 193: 2 COMMUNICATION ACTIVITIESThe ECB a
Page 195 and 196: Panel at the Fifth ECB Central Bank
Page 197 and 198: 1 DECISION-MAKING BODIES AND CORPOR
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Page 201 and 202: 1.3 THE EXECUTIVE BOARDThe Executiv
Page 203 and 204: 1.4 THE GENERAL COUNCILThe General
Page 205 and 206: The Eurosystem/ESCB committees have
Page 207 and 208: members of the Executive Board. 13
Page 209 and 210: for their current position. On the
Page 211 and 212: statistical office (Statistisches B
Page 213 and 214: 4 ANNUAL ACCOUNTS OF THE ECB212 ECB
Page 215 and 216: function, and by the Governing Coun
Page 217 and 218: BALANCE SHEET AS AT 31 DECEMBER 200
Page 219 and 220: PROFIT AND LOSS ACCOUNT FOR THE YEA
Page 221 and 222: mid-market prices on 30 December 20
Page 223: The defined benefit obligation is c
Page 227 and 228: Eurosystem (see “Banknotes in cir
Page 229 and 230: (see “Banknotes in circulation”
Page 231 and 232: values at which the transactions we
Page 233 and 234: 15 CAPITAL AND RESERVESCAPITALPursu
Page 235 and 236: epresenting the remainder of its ca
Page 237 and 238: NOTES ON THE PROFIT AND LOSS ACCOUN
Page 239: individual circumstances. Basic sal
Page 243 and 244: 5 CONSOLIDATED BALANCE SHEET OF THE
Page 246 and 247: ANNEXES
Page 248 and 249: Number Title OJ referenceECB/2008/1
Page 250 and 251: Number Title OJ referenceECB/2009/1
Page 252 and 253: Number 2 Originator SubjectCON/2008
Page 258 and 259: Number 4 Originator Subject OJ refe
Page 260 and 261: oth the marginal lending facility a
Page 262 and 263: OVERVIEW OF THE ECB’S COMMUNICATI
Page 264 and 265: y the respective NCBs will also be
Page 266 and 267: OPEN MARKET OPERATIONS BY CURRENCYE
Page 268 and 269: USD operationsType oftransaction 1)
Page 270 and 271: DOCUMENTS PUBLISHED BY THEEUROPEAN
Page 272 and 273: 95 “Financial stability challenge
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1012 “Petrodollars and imports of
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GLOSSARYThis glossary contains sele
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Economic analysis: one pillar of th
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Financial stability: condition in w
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MFIs (monetary financial institutio
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Reserve base: the sum of the eligib
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ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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