Companies that provide financial services make up the Financial Corporations Institutional Sector. Banks, credit unions, insurers, pension funds and investment funds are all classified as Financial Corporations. This sector also includes fund management companies, brokers, the stock exchanges, financial regulators and other institutions providing support to the financial sector. If a group of corporations has a treasury arm or a holding company, that part of the group is in the Financial Corporations Sector, regardless of the main activity of the group.
Financial corporations generally have large Financial Assets and financial liabilities, on which they receive and pay Investment Income. Many large investment funds are located in Ireland but manage money whose owners are in other countries. These funds invest most of that money in other countries as well. As a result, they have large assets and liabilities in Ireland, they receive large investment income from abroad and pay large investment income out again. What remains in Ireland is the cost of administering the fund here.
In National Accounts we include all Financial Corporations operating in Ireland in the accounts. This means that if a Government has a branch here, then it is included. If an Irish-owned corporation has a branch in another country, then that branch is excluded.
Financial Corporations are for-profit entities, that is market entities. A finance company that doesn't let market forces determine what services it provides, but provides services as directed by Government is in the Government Institutional Sector, and is not grouped with Financial Corporations. So, for example, the National Asset Management Agency (NAMA) provides a financial service but it is in the Government sector because it is controlled by Government and is not commercial. AIB, which is largely owned by the Government, is a for-profit entity, so it is considered as a Financial Corporation in the Public Sector.
