Macroeconomic Statistics and the Current Crisis: Challenges Ahead and Statistical Initiatives at the IMF

1. Macroeconomic Statistics and the Current Crisis: Challenges Ahead and Statistical Initiatives at the IMF Alfredo M. Leone Deputy Director, Statistics Department Meeting of the OECD Short-term Economic Statistics Expert Group (STESEG) Paris, September 10-11, 2009

2. Two Key Issues Highlighted by the Current Crisis • The integration of economies and markets, as evidenced by the financial crisis spreading worldwide. • The growth of systemically important global financial institutions (SIGFIs), which spread across many markets worldwide.

3. Key Statistical Implications of the Current Crisis • The critical importance of relevant statistics that are timely, consistent, and comparable across countries. • Additional statistical needs for financial stability analysis. • The difficulty, and the importance, of sound indicators of the degree and location of leverage or excessive risk-taking. • The need to improve the communication of official statistics.

4. Macroeconomic Statistics: Challenges Ahead • Five key areas: • Sectoral balance sheet data • Improving availability, timeliness, frequency, and coverage of sectoral assets and liabilities • Public sector • Accounting for government intervention in response to the crisis (including contingent liabilities) • Ultimate risk and credit risk transfer • Capturing assets and liabilities of special purpose entities and off-balance sheet positions • Housing markets • Improving availability of housing-related data and making data cross-country comparable • Macroprudential risks • Improving indicators of financial soundness, including measures of leverage and liquidity

5. A Balance Sheet Approach’s View of the Gaps Off-Balance N/A Sheet Items Incomplete Incomplete Limited country coverage Limited country coverage Limited country coverage Limited country coverage Incomplete N/A Limited country coverage N/A Incomplete Limited country coverage

6. Data Gaps • Timeliness (reporting/disseminating lags) • Frequency (low periodicity of data) • Coverage • Country coverage • Off-balance sheet positions and special purpose vehicles (ultimate risk) • Shadow financial system • Exposures to complex structured products (credit risk transfer) • Cross-border counterparty exposures • Definition/coverage of government sector • Nonfinancial corporate and households sectors • Remaining maturity of outstanding liabilities • Nonfinancial assets (housing-related data)

7. New Initiatives (1) • Addressing data gaps: • Establishment of the Inter-Agency Group on Economic and Financial Statistics, IAG (2008) • BIS, ECB, Eurostat, IMF (Chair), OECD, UN, WB • Coordinate work to explore data gaps and strengthen data collection • G-20 Working Group on Reinforcing International Co-operation and Promoting Integrity in Financial Markets • Asked the IMF and the Financial Stability Board (FSB) to explore gaps and provide proposals to address them to the next meeting of G-20 Finance Ministers and Central Bank Governors (late 2009) • IMFC (IMF Governing Body) welcomed the work of the IMF and FSB to provide better indicators of systemic risks and address data gaps

8. New Initiatives (2) • Improving communication of official statistics • IAG launched common public online website (April 2009): the Principal Global Indicators which displays for G-20 economies: • Predetermined tables of statistics • Cross-country datasets • Links to national websites of central banks, regulatory agencies, and statistical offices • Links to the SDDS National Summary page • Links to websites of the IAG agencies

10. Statistical Initiatives at the IMF (1) • Further implementation of standardized report forms (SRFs) to enhance the Balance Sheet Approach (BSA): • Assistance to countries, including G-20 economies, in the adoption of SRFs, leading to inclusion of SRF-based monetary data for more countries in the International Financial Statistics. • More comprehensive coverage of depository institutions than is currently the case. • Improving reporting data for other financial corporations (OFCs), a sector widely held responsible for a leading role in many countries in the current financial crisis. • At the moment, the number of countries reporting data on OFCs is relatively small, about 30 out of 115 SRF-reporting countries.

11. Statistical Initiatives at the IMF (2) • Regular compilation and dissemination of Financial Soundness Indicators (FSIs), a complement to the BSA in enhancing vulnerability and financial stability analysis • http://fsi.imf.org/ • FSIs include indicators of the health of entire sectors of financial institutions, but also of the counterpart corporate and household sectors, and of relevant markets. • FSIs, conceived as a new area of statistics—macroprudential statistics—aims to fill the gap between macroeconomic statistics and micro-prudential data.

12. Statistical Initiatives at the IMF (3) • Development of a conceptual framework for the compilation and presentation of debt securities (issuance and holdings) with the BIS, ECB, and the WB (Working Group on Securities Databases) • http://www.imf.org/external/np/sta/wgsd/index.htm • Preparation of a Handbook on Securities Statistics • In part one of the Handbook, the conceptual framework covers position and flow statistics on debt securities issues. • Part two, in preparation, will focus on debt securities holdings.

13. Statistical Initiatives at the IMF (4) • Promotion of high-frequency (quarterly) general government sector data on a harmonized basis • Increasing levels of deficits and debts as a result of the crisis are generating increasing interest in fiscal data over the next years. • STA will also continue working to raise awareness for data quality in GFS to ensure proper definitions and facilitate country comparability.

14. Statistical Initiatives at the IMF (5) • Development of Public Sector Debt Guide for the collection and dissemination of public sector debt statistics. • Coordinated Direct Investment Survey (CDIS) project: • Proceed with a survey to improve the quality of Foreign Direct Investment data at global and bilateral levels. • Establish a comprehensive database of direct investment positions (as of the end of 2009), disaggregated by instrument (equity and debt) and by counterpart economy of the immediate investor. • More than 130 economies have already expressed an interest in participating in the survey.

15. Concluding Remarks • History has demonstrated that crises create new demands for financial and economic data • this crisis is no different • Work is needed along two main two tracks: • making data more accessible and timely; and • addressing new data needs arising from the crisis. • International co-operation and coordination is key to achieve success.