Among assets not covered by these statistics are certificates of deposit issued by banks abroad (see Banks in the BIS reporting area, below), foreign currency commercial paper, foreign currency medium-term notes and other foreign currency short-term paper issued in the United Kingdom or overseas.
In assessing the liquidity of those assets that are outside M4, users should remember that M4 itself contains some comparatively illiquid elements. M4 contains deposits of any maturity with Monetary and Financial Institutions (MFIs: consisting of the central bank, other UK-resident banks and building societies), and some paper and other capital market instruments of not more than five years' original maturity. But in practice, the majority of M4 is of less than five years' original maturity.
Banks in the BIS reporting area
The Bank for International Settlements (BIS) provides comprehensive data on international banking business conducted in the financial centres of the BIS reporting area. The number of countries within this area has increased over time (and currently stands at 40). Identification of the UK M4 private sector in these data is not entirely accurate. Holdings of certificates of deposit are generally not covered by these statistics.
M4 private sector's holdings of foreign currency deposits
Foreign currency deposits held by the M4 private sector at MFIs in the UK or at institutions in the Channel Islands and Isle of Man (and at banks in the BIS area) may, at some point, be spent in the UK, overseas, or may represent a store of value relevant to UK economic activity.
Non-residents' sterling deposits
Deposits by non-resident banks with MFIs in the United Kingdom include deposits from central monetary institutions (i.e. part of other countries' official reserves), as well as deposits from commercial banks abroad. When combining series, users should be aware of potential double-counting: for example, sterling deposits at banks in the BIS area may in turn be placed by those banks as sterling deposits in UK banks or institutions in the Channel Islands and the Isle of Man (or indeed at other banks in the BIS area).
Non-residents' sterling deposits, particularly those held by non-banks at MFIs in the United Kingdom, may, at some point, be spent in the United Kingdom; alternatively, they may be part of non-residents' global liquid assets, held temporarily or for a longer term in the United Kingdom as a store of value.
Sterling Treasury bills
Bills issued with an original maturity of six months or less are marketable and are likely to be considered liquid by their holders.
Local government debt
Covers a variety of instruments, all with an original maturity of up to one year; in general, these instruments would probably be viewed as fairly liquid.
Certificates of tax deposit
These are not marketable; the return is greater when used to pay tax, so that their holders may not consider them liquid for other purposes.
The gilts data relate to marketable gilts, which are likely to be considered liquid by their holders. The degree of liquidity may be affected by the remaining maturity. The maturity split of total gilts is also available. There is also a small number of non-marketable (NILO) stocks in issue. Please see the section on 'other sterling debt' in the Explanatory Notes for the discontinued Table D1.1(Public Sector Net Debt) for a definition of NILO stocks.
Sterling commercial paper
Sterling commercial paper is marketable paper issued with maturities of up to and including one year. This series excludes paper issued by MFIs (because these issues are included in M4 if held by the M4 private sector and in the non-residents’ sterling deposits if held by non-residents). It also excludes paper held by MFIs. The series may include a small element held by non-residents but is likely to be held predominantly by the M4 private sector.
Sterling medium-term notes
Sterling medium-term notes are marketable securities issued with original maturities of over one year and up to (and including) five years. They include both fixed and floating-rate notes. The series published here is the total of all issues except those by MFIs (which are included in M4 if held by the M4 private sector and in the non-residents' sterling deposits if identified as being held by non-residents). There are no data distinguishing MFIs', public or non-residents' holdings of this instrument; hence this series comprises all sectors' holdings.
Other sterling paper maturing within one year
This series comprises all holdings of sterling bonds issued by the UK private sector and the non-residents sector of original maturity of more than five years, which are due to mature within one year. The majority are floating-rate issues, which may be considered more liquid than fixed-rate assets. There are no data distinguishing MFIs', public or non-residents' holdings of this instrument; hence this series comprises all sectors' holdings.
Residual maturity breakdown of gilts
The maturity breakdown cannot be allocated into sectors and hence both series cover all holders of gilts.
Sterling unused credit facilities
Coverage is incomplete - notably, the unused portion of credit card holders' limits is not included. Some banks report no unused facilities (although requests by borrowers to increase the credit limits are often met, and borrowers would probably expect them to be met). On the other hand, borrowers may have facilities with several institutions without intending to draw on them all simultaneously. Where a facility may be drawn in either sterling or foreign currency at the borrower's option, it is reported in foreign currency facilities - so that potential sterling facilities may be larger than the sterling facilities figures suggest.