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Following the Money: U.S. Finance in the World Economy
sary. The Federal Reserve Board and the Treasury Department should examine the two sets of forms to determine if the more detailed monthly FFIEC reports are sufficient to meet their needs for information on foreign-currency exposure.
Through the quarterly Call Report (FFIEC 031, 032, 033, and 034) (see Table 3-3), the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency collect detailed information on the financial conditions of all banking institutions in the United States. In view of the volume of data gathered in the Call Report, the Treasury Department, in collaboration with the Bureau of Economic Analysis, should thoroughly review the usefulness of the TIC B forms, which collect monthly, quarterly, and semiannual information on banks' assets and liabilities with foreigners (see Table 3-1). If duplications exist or certain reported TIC data are no longer useful and meaningful, the TIC forms should be simplified.
In view of the incomplete coverage under the TIC C form on nonbank commercial claims and liabilities with unaffiliated foreign firms, such as trade credit and accounts receivable and payable (see CQ-2 in Table 3-1), the Treasury Department and BEA should consider integrating Treasury's CQ-2 form with BEA's direct investment forms (see Table 3-2). In addition to direct investors, BEA should require firms that generate significant commercial credit and liabilities through trade to file the integrated form. Major U.S. and foreign exporters and importers located in the United States should be targeted. In addition, harmonizing the definitions of accounts payable and receivable used in balance-of-payments reporting and those used by firms in financial accounting under generally accepted accounting principles would help improve coverage. Under such principles, cash items are not included in accounts receivable or payable; they are, however, included in balance-of-payments reporting.
The panel attaches great importance to BEA's 5-year censuses of outward and inward direct investments because they yield basic information on the economic effects of these enterprises. However, the panel notes that the list of questions and the degree of detail have multiplied over the years and is concerned that the reporting burden may outweigh the benefits. Accordingly, the panel recommends that BEA, in consultation with data users, review the need for each of the major sections of the censuses and the breakdowns, taking into account the extent to which the data developed are of good quality and used. (3-21)