ANNUAL REPORT 2008 - Polymer Bank Notes of the World

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The principal assumptions used for the purposesof calculating the staff scheme liability are asshown in the following table. The expected rateof return on plan assets is used by the actuariesfor the purpose of calculating the annual chargeto the Profit and Loss Account.2008%2007%Discount rate 5.75 5.30Expected return on plan assets 6.50 6.50Future salary increases 2.00 2.00Future pension increases 2.00 2.0013 PROVISIONSThis item consists of a provision against foreignexchange rate, interest rate and gold price risks andother miscellaneous provisions. The latter includean appropriate provision against the contractualobligation of the ECB to restore its currentpremises to their original condition when they arevacated and the ECB moves to its new site.The Governing Council, taking into account theECB’s large exposure to foreign exchange rate,interest rate and gold price risks, and the size ofits revaluation accounts, deemed it appropriateto establish a provision as at 31 December 2005against these risks. This provision will be usedto the extent deemed necessary by the GoverningCouncil to offset future realised and unrealisedlosses, in particular valuation losses not coveredby the revaluation accounts. The size andcontinuing requirement for this provision isreviewed annually, based on the ECB’sassessment of its exposure to the above risks.This assessment takes a range of factors intoaccount, including in particular the level ofholdings of risk-bearing assets, the extent ofmaterialised risk exposures in the currentfinancial year, projected results for the comingyear, and a risk assessment involvingcalculations of Values at Risk (VaR) on riskbearingassets, which is applied consistentlyover time. 13 The provision, together with anyamount held in the general reserve fund, maynot exceed the value of the ECB’s capital paidup by the euro area NCBs.As at 31 December 2007 the provision againstforeign exchange rate, interest rate and goldprice risks amounted to €2,668,758,313. Inaccordance with Article 49.2 of the Statute ofthe ESCB, the Central Bank of Cyprus and theCentral Bank of Malta contributed the amountsof €4,795,450 and €2,388,127 respectively tothe provision with effect from 1 January 2008.Taking the results of its assessment into account,the Governing Council decided to transfer, asat 31 December 2008, an additional amount of€1,339,019,690 14 to the provision. This increasedthe size of the provision to €4,014,961,580,which is the value of the ECB’s capital paid upby the euro area NCBs as at 31 December 2008,and reduced net profit to €1,322,253,536.14 REVALUATION ACCOUNTSThese accounts represent revaluation balancesarising from unrealised gains on assets andliabilities. In accordance with Article 49.2 of theStatute of the ESCB, the Central Bank of Cyprusand the Central Bank of Malta contributed theamounts of €11.1 million and €5.5 millionrespectively to these balances with effect from1 January 2008.2008€2007€Change€Gold 6,449,713,267 5,830,485,388 619,227,879Foreign currency 3,616,514,710 0 3,616,514,710Securities andother instruments 1,286,373,348 338,524,183 947,849,165Total 11,352,601,325 6,169,009,571 5,183,591,754The foreign exchange rates used for the yearendrevaluation were as follows:Exchange rates 2008 2007US dollars per euro 1.3917 1.4721Japanese yen per euro 126.14 164.93Euro per SDR 1.1048 1.0740Swiss francs per euro 1.4850 Not applicableDanish kroner per euro 7.4506 Not applicableEuro per fine ounce of gold 621.542 568.23613 See also Chapter 2 of the ECB’s Annual Report.14 This transfer was funded from realised gains on gold salesof €0.3 billion and the ECB’s income on euro banknotes incirculation amounting to €1.0 billion.ECBAnnual Report2008231
15 CAPITAL AND RESERVESCAPITALPursuant to Council Decisions 2007/503/ECand 2007/504/EC of 10 July 2007, taken inaccordance with Article 122(2) of the Treaty,Cyprus and Malta adopted the single currency on1 January 2008. In accordance with Article 49.1of the Statute of the ESCB and the legal actsadopted by the Governing Council on31 December 2007, 15 the Central Bank of Cyprusand the Central Bank of Malta paid up amountsof €6,691,401 and €3,332,307 respectively as at1 January 2008, representing the remainder oftheir capital subscriptions to the ECB. As aconsequence, the ECB’s paid-up capital increasedfrom €4,127,136,230 on 31 December 2007 to€4,137,159,938 on 1 January 2008, as shown inthe table below: 1615 Decision ECB/2007/22 of 31 December 2007 on the paying-upof capital, transfer of foreign reserve assets and contributions bythe Central Bank of Cyprus and the Central Bank of Malta to theEuropean Central Bank’s reserves and provisions, OJ L 28, 1.2.2008,p. 36; Agreement of 31 December 2007 between the EuropeanCentral Bank and the Central Bank of Cyprus regarding the claimcredited to the Central Bank of Cyprus by the European Central Bankunder Article 30.3 of the Statute of the European System of CentralBanks and of the European Central Bank, OJ C 29, 1.2.2008, p. 4;Agreement of 31 December 2007 between the European CentralBank and the Central Bank of Malta regarding the claim creditedto the Central Bank of Malta by the European Central Bank underArticle 30.3 of the Statute of the European System of Central Banksand of the European Central Bank, OJ C 29, 1.2.2008, p. 6.16 Individual amounts are shown rounded to the nearest euro.Subtotals in the tables of this section may not add up to the totaldue to rounding.Capital key until31 December 2007%Paid-up capital until31 December 2007€Capital key from1 January 2008%Paid-up capital from1 January 2008€Nationale Bank van België/Banque Nationale deBelgique 2.4708 142,334,200 2.4708 142,334,200Deutsche Bundesbank 20.5211 1,182,149,240 20.5211 1,182,149,240Central Bank and Financial Services Authority ofIreland 0.8885 51,183,397 0.8885 51,183,397Bank of Greece 1.8168 104,659,533 1.8168 104,659,533Banco de España 7.5498 434,917,735 7.5498 434,917,735Banque de France 14.3875 828,813,864 14.3875 828,813,864Banca d’Italia 12.5297 721,792,464 12.5297 721,792,464Central Bank of Cyprus - - 0.1249 7,195,055Banque centrale du Luxembourg 0.1575 9,073,028 0.1575 9,073,028Central Bank of Malta - - 0.0622 3,583,126De Nederlandsche Bank 3.8937 224,302,523 3.8937 224,302,523Oesterreichische Nationalbank 2.0159 116,128,992 2.0159 116,128,992Banco de Portugal 1.7137 98,720,300 1.7137 98,720,300Banka Slovenije 0.3194 18,399,524 0.3194 18,399,524Suomen Pankki – Finlands Bank 1.2448 71,708,601 1.2448 71,708,601Subtotal for euro area NCBs 69.5092 4,004,183,400 69.6963 4,014,961,580Българска народна банка (Bulgarian National Bank) 0.8833 3,561,869 0.8833 3,561,869Česká národní banka 1.3880 5,597,050 1.3880 5,597,050Danmarks Nationalbank 1.5138 6,104,333 1.5138 6,104,333Eesti Pank 0.1703 686,727 0.1703 686,727Central Bank of Cyprus 0.1249 503,654 - -Latvijas Banka 0.2813 1,134,330 0.2813 1,134,330Lietuvos bankas 0.4178 1,684,760 0.4178 1,684,760Magyar Nemzeti Bank 1.3141 5,299,051 1.3141 5,299,051Central Bank of Malta 0.0622 250,819 - -Narodowy Bank Polski 4.8748 19,657,420 4.8748 19,657,420Banca Naţională a României 2.5188 10,156,952 2.5188 10,156,952Národná banka Slovenska 0.6765 2,727,957 0.6765 2,727,957Sveriges Riksbank 2.3313 9,400,866 2.3313 9,400,866Bank of England 13.9337 56,187,042 13.9337 56,187,042Subtotal for non-euro area NCBs 30.4908 122,952,830 30.3037 122,198,358Total 100.0000 4,127,136,230 100.0000 4,137,159,938232 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
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1 EUROPEAN ISSUESIn 2008 the ECB co
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for financial institutions, to faci
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1.3 DEVELOPMENTS IN AND RELATIONS W
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On a number of occasions in 2008, t
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Page 185 and 186: 1 ACCOUNTABILITY VIS-À-VIS THE GEN
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Page 190 and 191: CHAPTER 7EXTERNALCOMMUNICATION
Page 192 and 193: 2 COMMUNICATION ACTIVITIESThe ECB a
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Page 201 and 202: 1.3 THE EXECUTIVE BOARDThe Executiv
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Page 213 and 214: 4 ANNUAL ACCOUNTS OF THE ECB212 ECB
Page 215 and 216: function, and by the Governing Coun
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Page 225 and 226: NOTES ON THE BALANCE SHEET1 GOLD AN
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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
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Page 266 and 267: OPEN MARKET OPERATIONS BY CURRENCYE
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Page 270 and 271: DOCUMENTS PUBLISHED BY THEEUROPEAN
Page 272 and 273: 95 “Financial stability challenge
Page 274 and 275: 1012 “Petrodollars and imports of
Page 276 and 277: GLOSSARYThis glossary contains sele
Page 278 and 279: Economic analysis: one pillar of th
Page 280 and 281: 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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