Financial intermediation consists in channelling funds from institutional units that have surpluses towards units seeking funds. Financial intermediaries are not merely agents acting on behalf of these units. They bear a risk by acquiring financial assets and by entering into commitments on their own account.

Financial corporations are divided into three groups: financial intermediaries other than insurance corporations and pension funds (S12A), financial auxiliaries and captive financial institutions and money lenders (S12E), and insurance corporations and pension funds (S12I).

Financial institutions (S12A) encompass the following subsectors:

Central Banks (S121) including all financial corporations and quasi-corporations whose primary function is to issue currency, maintain its internal and external value and hold currency reserves. In France, S121 comprises the Banque de France, the Exchange Stabilisation Fund, and the Overseas Departments Note-Issuing Bank (French Antilles and Guiana),
Deposit-taking corporations except the Central bank (S122), including all financial corporations and quasi-corporations whose main activity is to receive deposits (or close substitutes), to grant loans, or to make investments in securities for their own account (commercial banks, savings banks, the Banque Postale, the Caisse des Dépôts et Consignations, municipal credit and rural credit, specialised banks, corporations engaged in granting mortgages, etc.). This subsector may also feature companies that grant mortgage loans, as well as collective investment undertakings when they receive funds from the public. Subsectors S121 and S122 form the population of Monetary Financial Institutions (MFI) used for the compilation of Monetary Union statistics,
MMF - money market funds (S123), encompassing financial corporations and quasi-corporations other than those in S121 and S122, whose main activity is the issuing of investment fund shares or units as close substitute for deposits from institutional units, and, for their own account, to make investment primarly in money market fund shares/units, short term debt securities. These funds include investment trusts and other collective investment schemes whose shares or units are close substitutes for deposits,
Non-MMF investment funds (S124), encompassing all collective investment schemes except those classified in the MMF sub-sector S123, whose main activity is to issue investment fund shares or units that are not close substitutes for deposits, and, on their own account, to make investments primarly in financial assets and non-financial assets (usually real estate). Non-MMF investment funds cover investment trusts, unit trusts ans other collective investment schemes whose investment shares or units are not seen as close substitutes for deposits (open-ended investment funds, closed-ended investment funds with a fixed capital share, real estate investment funds, "funds of funds", hedge funds, etc.),
ther financial intermediaries except insurance corporations and pension funds (S125), encompassing all financial corporations and quasi-corporations whose main activity is the provision of financial intermediation services by incurring liabilities in forms other than currency, deposits or investment fund shares parts, or in relation to insurance, pension and standardized guarantee schemes. They are financial vehicle corporations engaged in securitisation transactions, security and derivative dealers, financial corporations engaged in lending and specialized financial corporations.

Financial auxiliaries (S126) and captive financial institutions and money lenders (S127) form S12E, and encompass:

financial corporations and quasi-corporations whose main activities are highly related tofinancial intermediation but without actually belonging to this category (insurance brokers and consultants, loan brokers, securities brokers, portfolio management companies, flotation corporations that manage the issue of securities, currency exchange offices and bank card groups).
financial corporations and quasi-corporations that are neither engaged in financial intermediation nor in providing financial auxiliary services, and where most of either their assets or their liabilities are not transacted on open markets (holding companies, "brass plate" companies, etc.).

Insurance corporations (S128) and pension funds (S129) form S12I and encompass:

financial corporations and quasi-corporations whose primary function is to supply financial intermediation services resulting from risk pooling (life and non-life insurance, mutual health insurance, provident funds). These companies’ undertakings are mainly technical insurance provisions,
autonomous financial corporations and quasi-corporations whose primary function is to supply financial intermediation services resulting from the pooling of social risks and needs of the insured persons. Pension funds, which are distinct from mandatory social insurance schemes and have a total autonomy of decision, provide to the insured persons income in retirement (and also benefits after death or disabled benefits). Currently, they are almost non-existent in France.

Information sources and data collection

The financial accounts are built on the compilation of highly varied data. At the core of the system are accounting data from financial institutions, completed by information from other sectors.

Like monetary statistics, the financial accounts use the accounting documents of credit institutions and data on insurance companies, centralised by the financial sector’s Prudential Supervisory Authority.

The financial accounts of general government are drawn up by the Finance and publics accounts Ministry’s General Directorate of Public Finances.

The stock-flow account of the rest of the world is drawn up via France’s balance of payments and international investment position by the Balance of Payments Directorate of the Banque de France.

A number of data relating to the financial transactions of non-financial enterprises are compiled by INSEE from tax balance sheets. They mainly concern commercial loans and current accounts.

As regards stock market transactions, the Banque de France keeps a file of bond issues on the domestic market and on the euro market. This file along with foreign market data listed by the balance of payments allow the compilation of statistics on net issues and outstanding by debtor sector. In conjunction with Euronext France, the Banque de France also compiles statistics on share issues by analysing official journals.

Valuation methods

The price concept used by ESA 2010 to elaborate flows and outstanding is that of the "market price". Financial transactions are thus recorded at transaction value:

When the transaction involves means of payment in the national currency, the transaction value is equal to the amount of the payment means exchanged,
When the transaction involves means of payment in other currencies, the transaction value is equal to the amount of the payment means exchanged, converted into the national currency via the exchange rate in force on the market at the date of payment.

Outstanding financial assets and liabilities have to be valued in current prices and counted for an identical value, whether they are recorded as assets or as liabilities.

The choice of valuation method strongly influences the quality of the financial accounts, not only in outstanding but also in flows.

As regards outstanding securities, the general principle used is to record outstanding securities and bonds, both assets and liabilities, at their market value. However, negotiable debt securities, the term of which may extend to seven years, are recorded for their nominal value.

The valuation of quoted securities, either bonds or shares, in the liabilities of the various sectors does not generally pose too many problems. A difficulty arises in estimating the value of unquoted shares. The solution recommended by ESA 2010 consists in applying to the amount of equity (capital plus reserves) of unlisted companies the "market capitalisation to equity" ratio of listed companies, subject to application of an illiquidity discount set at a flat rate of 25%. This calculation is made for around ten economic sectors.