VII Macroprudential Indicators and Data Dissemination
- Paul Hilbers, Alfredo Leone, Mahinder Gill, and Owen Evens
- Published Date:
- April 2000
This section reviews issues related to the public I dissemination of MPIs, in recognition of their crucial role in the strengthening of financial sector surveillance and the oversight of the global financial system. It discusses insights from IMF approaches to the data dissemination standards, taking into account the conclusions of the September 1999 consultative meeting on member countries’ and other experiences in MPI identification and dissemination.
The identification of a core set of MPIs is seen as one of the prerequisites for dissemination of MPIs to the general public. The core MPIs would have to fulfill the following criteria: (1) usefulness in financial systems surveillance; (2) comparability across countries; (3) feasibility of collecting harmonized data; and (4) existence of “best practices” with regard to coverage, periodicity, and timeliness of the data that are being disseminated. Given the substantial work ahead in crafting a core set of MPIs, participants at the meeting believed it was premature at this time to recommend specific modalities for dissemination of MPIs, but supported the development of incentives to national authorities to compile and disseminate them.
IMF Initiatives in Data Dissemination Standards
The SDDS and the General Data Dissemination System (GDDS) embody a structured approach to encourage data dissemination.85 The SDDS has operated since 1996 as a system of well-defined guidelines—that is, a standard—for countries to provide the public with comprehensive, timely, reliable, and accessible macroeconomic data.86 In order to meet the standard, the SDDS countries have made significant improvements in their practices for the compilation and dissemination of the SDDS data categories and underlying databases.
Whereas the SDDS is intended for countries that are actively involved in international capital markets, or that aspire to do so, and that have relatively well-developed statistical systems, the GDDS serves as a framework for the long-term improvement of data and statistical practices across the wider IMF membership. At the time the SDDS was initiated, its requirements were recognized as very demanding and not necessarily applicable or relevant for all countries. Consequently, it was agreed that the GDDS be created to provide a vehicle to support improvements in the statistical capacity of the remainder of the membership. The GDDS was established in 1997.
Lessons from the SDDS and GDDS
Three lessons can be drawn from the SDDS and GDDS approach:
- (1) The SDDS may be viewed as successful because it continues to provide incentives for countries to improve their practices on compiling and disseminating macroeconomic data. Countries are aware that subscribing to the SDDS may be viewed by market participants as highly desirable and could enhance their ratings on the international capital markets.
- (2) The prescriptions contained in the SDDS have been developed based on evidence of best or preferred practices in the compilation and dissemination of macroeconomic data by countries that participate in financial markets or that aspire to do so.
- (3) The establishment of two parallel tracks for work on data dissemination standards—SDDS and GDDS—entails a recognition of the different stages of development of countries’ statistical systems and the need for an approach to dissemination standards that takes this reality into account.
Conclusions on Dissemination Issues from the Consultative Meeting
The major conclusions on data dissemination reached by the participants of the consultative meeting can be summarized as follows:87
- There is no single set of MPIs that is currently being disseminated by many countries or that is seen as superior to others, nor are there clearly identifiable best practices with regard to the dissemination of MPI data.
- In the absence of a consensus concerning a core set of MPIs, it is premature to decide whether MPIs should be included in the SDDS or along other tracks for promoting dissemination.
- Differences in approaches to the degree of disseminating data, maintaining confidentiality, and providing assessments on the condition of the banking sector often seem to be based on different perceptions of how markets might react to this information. Some authorities fear that markets might react adversely to “bad” news about banking sector soundness. The “bad” news could be either perceived or officially validated by authorities’ assessments. Other countries disseminate a wide range of macroprudential indicators in the belief that these data would enable the markets to make the right decisions.88
- Participants agreed on the need for an effort at greater harmonization of data in terms of coverage, periodicity, timeliness, and public access.
- The meeting supported conducting a survey of national supervisors, statistical authorities, and users to evaluate the prospects for compiling and disseminating MPIs.
MPI Dissemination Standards
Dissemination standards typically evolve based on evidence of best practices that are comparable across countries.89 It is clear that significant work lies ahead in developing such good practices for MPIs, but also that it should take place in conjunction with progress in identifying a core set of MPIs for financial system surveillance, as well as in resolving the statistical issues of measurement.
Actual practice (still to be further investigated) may demonstrated) that certain MPIs are more relevant for a particular country or country-group and less for another, and (2) that countries differ in their statistical capabilities to collect reliable, frequent, and timely data on MPIs.
The current SDDS would perhaps provide a solution to the first situation by means of its “as relevant” provisions that exempt countries from certain requirements that may not be relevant for a country’s particular economic structure. In such cases, the country must make these differences transparent by providing explicit information in the metadata explaining how and why the particular data set is not considered to be relevant for the country’s economy.
As for the second situation, the case could be made for a differentiated approach to eventual MPI dissemination—for example, along the lines of the two tiers represented by the SDDS and the GDDS.
Incentives for the authorities to disseminate reliable and timely MPIs could come from different sources. Among these are international technical assistance to improve the collection and compilation of MPIs, and the “appeal” of a technical standard in which MPIs might be included.
With regard to the appeal of a standard, it should be noted that eventually including MPIs in the existing SDDS as a dynamic, evolving standard could have the following benefits: (1) further strengthening the role of the SDDS; (2) leveraging the “good will” of the international community vis-à-vis the SDDS; (3) improving the complementarity of macroeconomic and macroprudential indicators; and (4) broadening the application of the SDDS advantages, including the provision of a comprehensive set of metadata, eventual access to data for a particular country, and facilitation of potential cross-country metadata and data comparisons.
While the SDDS is designed to evolve to meet new challenges—and has already strengthened its prescription for dissemination of data on international reserves and external debt—adding MPIs to the SDDS may result in concerns on the pan of existing subscribers. This requirement was not envisaged at the time of subscription, and some countries may not be in a position to meet the MP1 prescriptions, though they are otherwise in observance of the SDDS. Also, including MPIs in the SDDS could conceivably prove daunting for potential new subscribers. These various considerations do not need to be resolved now. They can be revisited later, when more of the necessary preparatory work has been undertaken.
In light of the diverse practices in compiling MPIs and many potential statistical problems, special emphasis needs to be placed on developing a strategy regarding the role of metadata—the textual description of the data series. Information must be provided to users about the MPIs’ coverage, public access, integrity of the data, and quality of the data, including compilation methods, and adherence to or departures from relevant international standards.