Page 243 - Invited Paper Session (IPS) - Volume 1

IPS152 Paul F.
instruments issued by SPEs. Section 5 concludes with the need to carry on
2
sharing data and the importance of SPEs typology .

2. IMF SPE’s definition and its implementation in Luxembourg
An SPE, resident in an economy, is a formally registered and/or
incorporated legal entity recognized as an institutional unit,
(...)
SPEs transact almost entirely with non-residents and a large part of their
financial balance sheet typically consists of cross-border claims and
liabilities.
All Luxembourg financial institutions are formally registered. Amongst
them, which units looking like a captive financial institution would pass the
institutional unit test? In the example below, a MNE makes an investment from
country A to country C by setting up three entities in Luxembourg.
3
- S.1271, directly controlled by country A, is definitely an institutional unit .
- S.1272 theoretically may not pass the institutional unit test. However this is
of little relevance for External Sector Statistics, because it only has domestic
assets and liabilities.
- S.1273, is indirectly controlled by country A and has a claim on country C. It
may not pass the test either but the claim of S.127 Luxembourg to country C
would remain, even if the entities were consolidated.
Thus, a strict delineation of institutional units among captive entities does
not prove essential for Luxembourg External Sector Statistics. The picture
would change if, say, S.1271 would be a non-financial company S.11. Then all
three Luxembourg units would need to be consolidated and the claim to
country C would not be a claim of S.127 but a claim of S.11.

2 This note does not touch upon the (important) question of SPEs output.
3 SNA 2008 § 26.27 “Legal entities (...) are not combined if they are resident in different
economies.”

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