ANNUAL REPORT 2008 - Polymer Bank Notes of the World

The main components of this item are asfollows:2008€(a) Current accounts, money market deposits,securities and reverse repurchase agreementsin euro constitute the investment of theECB’s own funds (see note 12, “Otherliabilities”). The net increase in the value ofthe ECB’s own fund assets was due mainlyto the investment in the own funds portfolioof the counterpart of the amount transferredto the ECB’s provision against foreignexchange rate, interest rate and gold pricerisks in 2007, unrealised gains on securities(see note 14, “Revaluation accounts”) andincome received on the own funds portfolio.(b) The ECB holds 3,211 shares in the Bankfor International Settlements (BIS), whichare included at the acquisition cost of€41.8 million.OFF-BALANCE-SHEET INSTRUMENTS REVALUATIONDIFFERENCESIn 2008 this item was composed mainly ofvaluation gains in outstanding interest rate swaptransactions (see note 19, “Interest rate swaps”).ACCRUALS AND PREPAID EXPENSES2007€Change€Currentaccounts ineuro 4,936,630 5,153,295 (216,665)Money marketdeposits ineuro 150,000,000 120,000,000 30,000,000Securitiesdenominatedin euro 9,675,505,128 8,843,080,586 832,424,542Reverserepurchaseagreements ineuro 479,293,075 668,392,837 (189,099,762)Other financialassets 42,124,863 42,190,576 (65,713)Total 10,351,859,696 9,678,817,294 673,042,402In 2008 this position included accrued interestreceivable on the ECB’s claims related tothe allocation of euro banknotes within theEurosystem for the final quarter (see “Banknotesin circulation” in the notes on accountingpolicies), amounting to €500.4 million, andaccrued interest receivable on the TARGET2balances due from euro area NCBs for the finalmonth of 2008, amounting to €648.9 million.Also included under this item is accrued intereston securities (see also note 2, “Claims onnon-euro area and euro area residentsdenominated in foreign currency”, and note 6,“Other assets”) and other financial assets.SUNDRYThis item consists mainly of the accrued interimdistribution of the ECB’s income derived frombanknotes (see “Banknotes in circulation” inthe notes on accounting policies and note 5,“Intra-Eurosystem claims”).This item also includes positive balancesrelated to swap and forward transactions inforeign currency that were outstanding on31 December 2008 (see note 20, “Foreignexchange swap and forward transactions”).These balances arise from the conversion ofsuch transactions into their euro equivalents atthe respective currency’s average cost on theBalance Sheet date, compared with the eurovalues at which the transactions were initiallyrecorded (see “Off-balance-sheet instruments”in the notes on accounting policies).A claim against the German Federal Ministry ofFinance in respect of recoverable value addedtax and other indirect taxes paid is also includedunder this heading. Such taxes are refundableunder the terms of Article 3 of the Protocol onthe privileges and immunities of the EuropeanCommunities, which applies to the ECB byvirtue of Article 40 of the Statute of the ESCB.7 BANKNOTES IN CIRCULATIONThis item consists of the ECB’s share (8%)of the total euro banknotes in circulationECBAnnual Report2008227