About credit statistics

The BIS quarterly statistics on credit to the non-financial sector capture borrowing activity of the private non-financial sector (published since March 2013) and the government sector (published since September 2015) in more than 40 economies. Data on credit to the government sector cover, on average, 20 years, and those on credit to the private non-financial sector cover, on average, more than 45 years. 

On the lending side, two credit data series are provided. "Total credit" comprises financing from all sources, including domestic banks, other domestic financial corporations, non-financial corporations and non-residents. "Bank credit" includes credit extended by domestic banks to the private non-financial sector. 

On the borrowing side, "total credit" to the non-financial sector is broken down into credit to the government sector and the private non-financial sector, and the latter is further split between non-financial corporations and households (including non-profit institutions serving households). 

The financial instruments covered comprise currency and deposits (which are mostly zero in the case of credit to the private non-financial sector), loans and debt securities. The sum of these three instruments is defined here as "core debt". For the government sector, core debt generally represents the bulk of total debt. 

The statistics follow the framework of the System of National Accounts 2008, which mandates that outstanding credit instruments be valued at market values where market prices are observable. For credit to the government, data are also provided for nominal (face) values of government credit, since these can be useful in some forms of debt sustainability analysis. Nominal values are used in the European Union fiscal rules.

The credit-to-GDP gap - published as time series since September 2016 - is the difference between the credit-to-GDP ratio and its long-run trend. The published series cover 44 economies starting at the earliest in 1961. The credit-to-GDP ratio as published in the BIS database of total credit to the private non-financial sector, capturing total borrowing from all domestic and foreign sources, is used as input data. In the September 2016 BIS Quarterly Review, "Recent enhancements to the BIS statistics" summarised the characteristics of the data set.

While the use of these total credit series as input data facilitates comparability across countries, it means that the credit-to-GDP gaps published by the BIS may differ from those considered by national authorities as part of their countercyclical capital buffer decisions. The gap indicator was adopted as a common reference point under Basel III to guide the build-up of countercyclical capital buffers. Authorities are expected, however, to apply judgment in the setting of the buffer in their jurisdiction after using the best information available to gauge the build-up of system-wide risk rather than relying mechanistically on the credit-to-GDP guide. For instance, national authorities may form their policy decisions using credit-to-GDP ratios that are based on different data series from the BIS's as input data, leading to credit-to-GDP gaps that differ from those published by the BIS.

See also the Basel Committee on Banking Supervision page on countercyclical capital buffer.

The debt service ratios (DSRs) - published since September 2015 - reflect the share of income used to service debt for the household, non-financial corporate and total private non-financial sector (PNFS). DSRs for the total PNFS are estimated for 32 countries; for the household and non-financial corporate sectors, they are estimated for only 17 countries.

To derive the DSRs on an internationally consistent basis, the BIS applies a unified methodological approach and uses, where available, input data compiled on an internationally consistent basis (total stock of debt, income available for debt service payments, average interest rate on the existing stock of debt and the average remaining maturity). Although the applied methodology is subject to an approximation error when aggregate data are used, it correctly captures how the DSR in a particular country changes over time. However, it may not accurately measure the DSR level compared with the result that may be obtained from micro data.

For practical purposes, it is more meaningful to compare national DSRs over time (by, for instance, removing country-specific means) rather than compare their absolute levels, which are difficult to pinpoint. This approach also takes account of different institutional and behavioural factors affecting average remaining maturities.

The DSR provides important information about financial-real interactions. It is a reliable early warning indicator for systemic banking crises; a high DSR has a strong negative impact on consumption and investment.

The Joint External Debt Hub - developed jointly by the BIS, the IMF, the OECD and the World Bank - disseminates data on the external debt of developed, developing and transition countries and territories, as well as statistics on selected foreign assets. 

The joint statistics include quarterly data obtained by creditor and market sources, as well as national sources. They provide a breakdown by instrument and show measures of short-term debt not easily available from other sources. Although the joint statistics are unable to provide a fully comprehensive and consistent measure of total external debt in each country, they bring together the most relevant international comparative data currently available in this area. 

The 2013 External debt statistics: guide for compilers and users provides comprehensive guidance for measurement, compilation, analytical use and presentation of external debt statistics.